PHOENIX—Given a recent report on the uptick in Florida's hotel market, GlobeSt.com spoke with Bill Murney, HREC senior vice president in charge of the Phoenix office, to get a take on the state of the Valley's hotel industry.

GlobeSt.com: How is the investment market in the Phoenix Metro area?

Murney: The hotel investment market is picking up. There is not much for sale, but because most other top 25 markets have reached or exceeded their 2007 peak numbers, people feel Phoenix has more upside than a lot of those markets and are starting to look hard at Phoenix.

GlobeSt.com: How is the hotel sector rebounding in Phoenix? On the whole?

Murney: The market as a whole is at or above the 2007 peak, especially in gateway cities. So the coastal markets are doing very well and the middle of the country didn't take the hit those markets like Arizona, Florida and Nevada did.

The Phoenix market is finally getting some good traction this season. Hopefully it can maintain the momentum. Unfortunately the convention center can't seem to get any traction. Some of it's the continued fallout from SB 1070 when they got out of the mix on many conventions, and partly because group business as a whole has not recovered. We are finally absorbing the massive over supply we incurred in 2005-2008. Unfortunately, the summer kills us when the resorts are competing with all the other hotels for limited room nights. Some of the employment announcements and general upswing in commercial sector provide hope.

GlobeSt.com: Who are the buyers you are seeing out there for the assets?

Murney: We're seeing local, regional and national buyers, management companies with equity partners, public and private companies—all of the above.

GlobeSt.com: And on that note, is it the assets themselves that are getting interest or the note sales?

Murney: We haven't seen much in the way of note sales any longer. The vast majority of sales here for the past four years have been distressed properties. That is starting to change but hasn't really yet.

GlobeSt.com: What about rebranding?

Murney: Unfortunately the rebrands that have been available are down brands. Most investors are not interested in that, and are seeking the ability to renovate and upbrand an asset as their primary investment platform.

GlobeSt.com: What are some ways the phoenix hotel landscape has changed in your opinion?

Murney: It's starting to get better and I hope that this trend continues and no overbuilding takes place. The biggest hurdle to investor confidence in Phoenix is the lack of barriers to entry.