(Mark Your Calendars: RealShare HOTELS 2011, September 15 in New York City).
SAN FRANCISCO-According to Jones Lang LaSalle Hotels Hotel Intelligence San Francisco report, the city’s hotel deal volume is expected to range from $400 million to $500 million in 2011. This is based on the hotels that are in various stages of marketing and sale, including several iconic hotels currently on the market or recently sold.
“Hotel trades are off to a fast start in the Bay Area, as $220 million in transactions were completed during the first five months of 2011,” says John Strauss, a managing director for Jones Lang LaSalle Hotels. “REITs, private equity investors and off-shore groups are actively targeting investments in this sought-after hotel market, and in some cases are paying close to historic peak levels.”
The firm’s projection is comprised of the estimated transaction value of properties currently on the market that are expected to transact during the course of the year. “Though the market suffered more than the average of other major markets during the double-hit of the tech bust and the events of 9/11, San Francisco has consistently shown above-average growth in occupancy rates,” explains Andrea Grigg, a senior vice president for Jones Lang LaSalle Hotels. “San Francisco’s strong occupancy levels, second only to New York’s, support the high interest in the market.”
The outlook for visitor volumes is on the uptick, which will translate to further hotel room demand, according to the report. “No new hotel supply has entered San Francisco since 2008, a stark contrast to other major US gateway markets,” adds Grigg. The lack of recent supply openings affirms the exceedingly high barriers to entry in the city’s hotel market and explains investors’ high interest in acquiring existing hotels, as seen from the abundant transactions in the last 12 months.”
San Francisco’s market dynamics bode well for the near- and long-term outlook for industry fundamentals, particularly as higher-rated corporate and corporate group demand returns, says JLL Hotels. “San Francisco will remain in the top tier of US hotel investment markets, attracting significant attention from domestic and off-shore buyers who want to have a foothold in this key gateway market.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
