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Investors Standing on the Unsteady Edge

LIIC's annual survey indicates buyer trepidation over falling values, asset quality and the economy.

By Carl Cronan | Updated on May 18, 2008

Hotel investors are a lot like prospective homebuyers lately. The same knot in the gut applies in thinking a good deal today may be priced lower after awhile.

“A lot of buyers are having difficulty deciding whether to close on hotels now or waiting to see if that same hotel is cheaper in 12 months,” says Mike Cahill, president and founder of HREC-Hospitality Real Estate Counselors in Denver and co-chair of the Lodging Industry Investment Council. Cahill compiled this year’s LIIC Top Ten, a profile of investor sentiment and attitudes toward the industry in the coming year.

Topping the list, based on a survey of 40 industry executives, is a widening sentiment that lodging real estate values will continue to drop during the next 12 months. Cahill says 39% of respondents believe the decrease will exceed 5%, while another 36% indicate that it will be far less.

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