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News release

CHICAGO, IL

The Hangover is Over: Buyers are Active While Sell Intention Reaches a Four-Year High

Jones Lang LaSalle Hotels survey rank Hawaii, Chicago and Boston as most bullish for buys


CHICAGO, June 6, 2012 – Jones Lang LaSalle Hotels announced today that investors’ “buy” sentiment marks the dominant investor strategy in the United States, with 45.7 percent of respondents indicating that their primary investment intention over the next six months is to acquire assets. Concurrently, investors’ intentions to “sell” assets are at a four-year high, in anticipation of an increasingly active transactions market over the next six months. The firm’s Hotel Investor Sentiment Survey is directed toward the world’s 6,000+ leading hotel investors and owners.

“After having briefly been overtaken by the ‘hold’ sentiment in the previous survey, hotel investors are once again eager to buy. The increase in ‘buy’ intentions affirms our view that there is significant demand among private equity and institutional investors, and, increasingly, real estate investment trusts, to make hotel investments at a favorable basis,” said Arthur Adler, Managing Director and Americas CEO for Jones Lang LaSalle Hotels.

“Buy” intentions are highest for gateway markets such as Hawaii (69.0 percent of respondents), Chicago (60.0 percent), Boston (57.1 percent) and Miami (53.8 percent) as these markets have witnessed double-digit growth in revenue per available room (RevPAR) over the past year. Looking at North America, Canada’s “buy” intentions are highest in Vancouver at 43.8 percent and in Mexico City at 58.3 percent, which has rebounded strongly from its trough and is attracting interest from investors for acquisitions.

At the same time, an increased one out of 10 investors indicated that their primary focus over the next six months will be to sell assets. “The concurrent increase in ‘sell’ sentiment suggests that the amount of product available for purchase will increase over the next six months; together the survey responses point to an increasingly active investment market,” said Adler.

Across the Americas, the proportion of respondents who indicated “sell” as their dominant investment strategy inched up to the highest level in four years as investors perceive an attractive market for dispositions. Survey respondents’ intentions to sell assets are highest in Orlando (28.6 percent), Mexican Resorts such as Cancun/Riviera Maya and Los Cabos (25.0 percent), Tampa (23.3 percent) and Dallas (20.0 percent).

The largest categorical shift in investment intentions was marked by the retraction in “hold” sentiment, which declined by seven percentage points to 35.9 percent, suggesting that owners are more apt to sell for various reasons, including impending debt maturities, fund life issues requiring owners to create liquidity and strong investor demand for assets that result in favourable valuations for owners. Cities where the fewest amount of investors indicated a dominant “hold” sentiment include Chicago, Boston, Hawaii, Miami and Seattle. The ‘”hold” sentiment on the other hand dominates in Canada, where investors are looking to hold onto their investments with a view toward future capital appreciation.
In terms of asset types, 45.4 percent of survey respondents indicated they are targeting upscale properties – keeping upscale properties the most sought-after asset type in the United States. Mid-scale properties also remain of interest at 21.9 percent, while 18.3 percent of respondents indicated their primary interest lies in luxury hotels in high barrier to entry markets at pricing well below replacement cost.

To request a copy of Jones Lang LaSalle Hotels’ report, visit www.joneslanglasallehotels.com or www.jllhss.com.

About Jones Lang LaSalle Hotels
Jones Lang LaSalle Hotels is a global real estate services firm focused exclusively on hotels & hospitality. We provide acquisition and financing advice, valuations, investment sales and asset management for luxury hotels, select service and budget hotels, smaller hotels and pubs, from single assets to large portfolios and mixed-use developments.

In the last five years we completed nearly 4,000 advisory and valuation assignments and more sale, purchase and financing transactions than any other hotels real estate firm in the world…worth over $30 billion. With 42 offices in 20 countries, no other firm is better connected. Through our depth and breadth of research and experience we know the market at every level, we know the players and we know how to get results. www.joneslanglasallehotels.com