"We continue to actively seek hotels for our portfolio of full-service, upper-upscale hotels in areas with high barriers to new development," says Steve Mendell, HEI's EVP of acquisitions and development, in a statement. "For the first time in about 16 months, we are beginning to see hotel prices come in line with market expectations as the expectation gap narrows between buyers and sellers. We expect this trend to continue, with prices becoming even more attractive as the year progresses."

Noting the locally based company's "dry powder," Mendell continues, in the release, believes that their available cash and early start will translate into an advantage in the market. The goal is to scoop up hotels in CBD, choice suburban areas and airport locales. The fund will also look for hotels which can be purchased after construction from a third party developer. The fund is specifically aimed at purchases for 2009.