Hotel Sales Volume Rising as Liquidity Creeps Back into Commercial Real Estate
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U.S. on Pace to Close Almost 4x More Commercial Real Estate in 2011 When Compared to 2009
CoStar reports a resurgence in hotel transactions. The first-half of 2011 saw sales volumes reach $11.36 billion—up 134 percent from the same period in 2010 and up by more than 700 percent versus the first six months of 2009.
What is surprising is the comparison of hotel sales gain of 134 percent versus a 79 percent increase in retail property sales, 71 percent gain in office sales and a 61 percent rise in multi-family. Total commercial real estate sales are up a reported 67 percent reaching $129.4 billion in the first six months of 2011.
Note here: Real Capital Analytics estimated that that total commercial sales rose from $54 billion in 2009 to $120 billion in 2010 (down from almost $558 billion in 2007—Wow). I had originally projected commercial real estate sales in the $180 billion level for 2011, but had increased that forecast to $200 billion several months and again to $220 billion this past month. The 67 percent increase for the first half of 2011 would portend a $200 billion level, but I believe that the velocity of commercial sales will continue to accelerate, so I am sticking right now a $220 billion sales pace for 2011.
Hotel sales are now occurring for locations beyond the East and West Coasts and across all service levels (lower-end properties to high-end hotels). REITS, given their access to capital markets, have been what CoStar says is “aggressive buyers of hotels over the last 18 months, particularly in the top markets of New York, Washington, DC, San Francisco, Los Angeles and Miami.”
Sales of $100 million + properties in the first half of 2011 were the third greatest ever observed.
This excellent CoStar article a lot of other details and information—well worth a few minutes of your time.