Higher Hotel Traffic Spurs New Practice

SOUTHFIELD, MI-In response to an improved hospitality market both locally and nationally, Marcus & Millichap Real Estate Investment Brokerage Co. has added hotels to its list of properties. John Mandich, an investment broker for the company, will lead the state’s hospitality group. The company is listing six hotels in Michigan, and sold four of the property type in 2006.

The company hadn’t focused on hotels as an investment type before in Michigan, but the market has taken off nationally and is improving in the state, even as the Detroit area fights 30% vacancy rates for office buildings and has one of the toughest retail markets in the country. Mandich tells GlobeSt.com that though the hotel market took a huge blow a few years ago, it’s bounced back.

“We’re back to pre-9-11 days,” Mandich says. “Nobody wanted, or could, sell their properties during depressed times. Nationally, the occupancy rates dropped from 63% to 58%. Now things have recovered, there are many owners thinking about selling.” One large Detroit-area buyer was RLJ Development LLC, run by billionaire Robert L. Johnson, who purchased 120 hotels in 2006. The properties, purchased from White Lodging Services Corp. for more than $1 billion, included Detroit-area properties such as Marriotts in Pontiac and Grand Rapids.