Select service hotel transaction volume expected to reach $9.0 billion
JLL’s select service investor survey reveals cautious yet optimistic sentiment
CHICAGO, Dec. 3, 2019 – “Enhanced portfolio returns” and “resilient” are two phrases investors used to describe their perspective of U.S. select service hotel properties.
According to JLL Hotels & Hospitality’s U.S. Select Service 2019 Report, which targeted 4,500 investors and/or owners of select service properties in the U.S., more than 70.0 percent of survey respondents expect select service revenue per available room (RevPAR) to remain consistent or increase in 2020. Additionally, 61.0 percent of respondents expect to acquire both select service portfolios and single assets by year-end.
“There is an ongoing evolution of select service product,” says Managing Director Al Calhoun. “Newer select services brands are adapting to the local market, which caters to the consumer trend toward experiential travel. We anticipate continued strong demand for these assets – both single assets and portfolios.”
As of YTD August 2019, select service transaction volume accounted for 37.0 percent of all U.S. hotel transaction volume. JLL projects select service transaction volume to reach approximately $9.0 billion in 2019.
Secondary markets are primary acquisition targets, with 42.0 percent of survey respondents indicating these locations are where their focus lies. Additionally, 33.0 percent of survey respondents noted they were seeking acquisitions in gateway markets. The top five markets for buyers over the next are Los Angeles, San Diego, Atlanta, Boston and Indianapolis.
“Investors are cautious but optimistic,” says Managing Director Mark Fair. “Select service properties’ lower operating costs, paired with growing travel demand is very attractive to investors. Where there are compelling opportunities, there is strong competition.”
Access the full report here.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of more than 93,000 as of September 30, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.