CHICAGO-Jones Lang LaSalle Hotels managing directors Al Calhoun and Mark Fair tell GlobeSt.com that the select service properties, the mid-tier segment ranging from properties worth $5 million to $20 million, should see a doubling of portfolio sales this year. As corporate demand increases, investors are looking to expand holdings of these properties across the country, they say.

Calhoun says the increased demand is expected to bolster performance for the the entire hospitality industry in 2012, especially the branded properties and distressed sites. “Competitive bidding on auction sales and the purchasing of foreclosures and distressed assets, albeit at a slower pace, will also allow investors to acquire assets at a discount to replacement cost,” he says. Redevelopments of mid-tier properties face strong buyer demand, Calhoun says, though these properties could require overdue upgrades and capital infusions in the coming year to keep hotels at brand standards.

Fair says he believes enough demand will build up to see the start of new construction by 2014. Right now, however, Fair says lenders are using capital allocated to the hotel sector for acquisition financing, and there are ample opportunities for the debt they have to deploy. “New construction financing is still highly selective and will remain so through 2012,” Fair tells GlobeSt.com.