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News release

DENVER, CO

Denver Thrives as Modern, All-Season Convention City and Hotel Hot Spot

Jones Lang LaSalle Hotels reports transaction levels remain high in 2012 following record-setting 2011


DENVER, Oct. 17, 2012 – Jones Lang LaSalle Hotels today announced that Denver hotel transaction volume is holding steady at $217 million year-to-date, following its record-setting $389.9 million high in 2011. In the past twelve months, Denver hotels have commanded competitive pricing with upper upscale hotels trading in the $350,000 per key range, and select service hotels at more than $250,000 per key. The findings were announced at the Urban Land Institute’s (ULI) Fall Meeting in Denver.[i]

“While coastal cities and gateway markets like New York, Chicago, Miami, San Francisco and Los Angeles garner the most investor attention among lodging markets, Denver has grown in prominence and increasingly caught the eyes of investors,” said Adam McGaughy, Managing Director of Jones Lang LaSalle Hotels.

Greg Hartmann, Executive Vice President and National Director of Valuations of Jones Lang LaSalle Hotels adds, “The city has extremely low cap rates averaging seven percent - which is comparable to the gateway markets, despite the fact that the city has seen significant increases to supply in the last five years. Nearly 500 more rooms are due to come online in the near-term, even so, we expect occupancy rates to hold steady while the inventory diversifies even further.”

Denver wasn’t always such a hot spot for year-round travel. Prior to the millennium, the city was considered to have a cyclical economy and seasonal group market, well known for its winter ski resorts, with the remainder of the year often overlooked. However, the city has evolved over the last decade and now its occupancy rate holds at 75 percent on a year round basis, which is above historical averages. Investors are taking notice of the prime opportunity to host spring and fall conventions, which bodes well for the decade ahead.

“Denver’s success is driven by several factors, predominantly by the residential development in the Lower Downtown (LODO) area, and a growing office and retail sector,” suggests Hartmann. “Denver has become the “whole package”--a modern, year-round, four-sport, convention-oriented, leisure city all connected through a new bus and light rail system. It’s a model for non-coastal urban centers such as Houston, Dallas, Salt Lake City, Kansas City, Sacramento, San Jose, Omaha, and Cincinnati have begun to emulate in recent years with great success.”

Downtown Denver hotels can continue to post returns to their bottom line by pushing rates, particularly for conventions. Perception is changing, and the market is moving forward and fast becoming a key secondary market for both REIT’s and private equity investors.

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