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Correction Noted, Say Panelists--and Overdue

LOS ANGELES-Activity is a good thing, gathered lodging experts conclude. But if the deals getting done don't pencil out...

By Maria Wood | Updated on January 29, 2008

Michael Desiato, VP of the Real Estate Media division.LOS ANGELES—Even with the capital markets in disarray, the tone of this year’s Americas Lodging Investment Summit was far from somber. Indeed, speakers during the conference’s opening day on Monday said a correction and a return to more conservative underwriting was long overdue and a welcome change, even if uncertainty reigns at the present time.

One session, “New Transaction Paradigms–How to Improve Your Odds for a Successful Transaction,” discussed the new capital market reality. The panel was moderated by Michael G. Desiato, VP of ALM’s Real Estate Media division, publisher of GlobeSt.com. On the panel was Joel W. Hiser, CEO, Horwath Hospitality & Leisure LLC; Joseph Long, EVP, acquisitions and development for Kimpton Hotels & Restaurants; James T. Merkel, managing director, RockBridge Capital LLC; and Anupam Narayan, EVP and chief investment and financial officer for Red Lion Hotels Corp.

The panelists were in agreement that the capital markets have undergone a major shift, evidenced by the lack of available debt and tougher, and more expensive, lending terms for that which is being priced. This has led to a near-standstill in transaction activity. Another reason for the slowdown in dealmaking is the wide gap between asking prices by sellers and what buyers are willing to–or can–pay.

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