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Hotel Sales Market Poised for Another Record Year

CHICAGO-Jones Lang LaSalle Hotels tracks $21 billion in larger deals in 2005, breaking the previous record of $12.9 billion in 2004. However, a rise in capitalization rates from 6% is predicted.

By Mark Ruda | Updated on March 09, 2006

(To read more on the debt and equity markets, click here.)

CHICAGO-Hotel sales set another record in 2005, with more than $21 billion, according to Jones Lang LaSalle Hotels, shattering the $12.9-billion record in 2004. “The expectation of improving fundamentals and the increasing depth of capital will stimulate a similar level of transaction volume in 2006 and into 2007,” according to a report co-authored by Jones Lang LaSalle Hotels managing director and Americas chief executive officer Arthur Adler.

Adler, along with senior vice president Melinda McKay, director of marketing and research Kristina Paider and research analyst Leyla Leblecici, note some changes on the hotel acquisition horizon. Capitalization rates on 60 of last year’s larger deals they tracked plunged to 6%, more than a full percentage point lower than 2004.

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