News

03 Feb2015

Market Overview

Teague Hunter, President of Hunter Hotel Advisors

 

  • Throughout 2014, the lodging industry exhibited strong hotel fundamentals, making it a great time to buy, sell, develop, or refinance.

 

  • In 2014 the increasing demand for select-service hotels and the abundance of both debt and equity drove cap rates to an all-time low and pushed per key prices above replacement costs.

 

  • Having deployed so much capital on large portfolio purchases in 2014, the most aggressive buyers are expected to be more selective in 2015. These groups will be focused on higher RevPAR and younger assets in more desirable markets as opposed to trying to gain market share by acquiring volume

 

  • 2015 is going to be another great year to buy, sell or refinance while interest rates remain low, and the industry outlook stays positive

 

  • In 2016 rising interest rates and the potential for new supply will mean less demand for acquisitions leaving potential sellers facing a 3-5 year hold

 

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