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More DC Hotels Go On The Block

WASHINGTON, DC-Host Hotels & Resorts is the latest company to divest of some of its assets in a move that some say is timed at the market's peak point.

By Erika Morphy | Updated on March 02, 2007

WASHINGTON, DC-Speculation that the hotel cycle is nearing its peak is causing some hotel owners and REITs to sell off assets in order to capitalize on the record per key prices that many properties are realizing. “The smartest people I know in this industry are starting to sell,” Cameron Larkin, SVP of Hospitality Financing & Business Development, at the Texas-based First American Realty Associates LLC tells GlobeSt.com.

This particular cycle has lasted longer than usual because no supply entered the market after 9-11 for several years, he explains. However new supply is starting to enter the market and is expected to have an affect on existing assets. “Now is the perfect time to sell because pricing is still strong and the cost of debt financing for hotels is still low.”

“In the Washington, DC area, for example, we recently got a request to look at a four-hotel portfolio for financing.” Larkin says that the owner was looking at a cap rate in the low 7s. “I don’t know what a new owner can do to the property to achieve a reasonable return,” he says.

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