Hotel Assets Group Speaks On Today's Current Real Estate Cycle
ATLANTA – April 24, 2013 – Hotel AG has approximately 300 engagements on the market today with a blend of several specialty groups including select service, full service, CMBS/bank and portfolios. The vast majority of inventory the firm has on the market is upscale select service hotels and portfolios. An increasing percentage of the current offerings are full service assets with a decreasing percentage of CMBS/bank foreclosures. The firm’s almost 300 engagements include 36 full service assets with a healthy mix of CMBS/bank work as well. The significance is the product shift to more yield/retail assets as compared to the heavy focus on lender work. Michael Bernath, vice president and senior partner of the firm, commented, "We continue to see a lot of interest in the top tier select service brands within the Hilton, Marriott, IHG, Starwood and Hyatt chains from institutional investors. While many groups are focused on specific markets within the top 25 MSAs, a large portion of these buyers are solely focused on their return on a given investment. All-in cost basis (purchase price, closing costs, PIP, etc.) plays a major factor in the total return for a property, and many groups are focused on properties that can be purchased below replacement cost. "There also continues to be a focus on purchasing assets in bulk, as part of a large portfolio, as opposed to a one-off purchase. Many large REITs and private equity groups need to deploy large amounts of capital, and the purchasing of larger portfolios allows them to more efficiently use their resources. By utilizing leverage in the form of securitized, non-recourse CMBS debt, portfolio sales provide the highest returns for institutional buyers and their investors. "Turnaround opportunities continue to attract significant interest as well. These types of properties may lack existing cash flow, but have significant upside for a potential buyer. The upside could be realized by changing the management, changing the room/demand mix (selling more rooms on an extended stay basis, rather than a nightly basis, or vice versa), rebranding the property or through adaptive reuse. Many of the available turnaround opportunities that we are seeing currently are typically bank owned REO assets.''
AG Hotel AG is a national hotel brokerage firm headquartered in Atlanta, Georgia. The firm has closed 1 hotel transaction every 7 days for the past 30 months and 76 hotels within the last 12 months. Today the firm has almost 300 hotels on the market with a large percentage of the 300 under sale agreement. The firm specializes in select service and full service hotels within the US and works with CMBS lenders, whole loan banks, REITs, public companies, investment funds and private investors. The firm has 15 national brokers and 19 partners and can be found online at www.hotelassetsgroup.com.published: 04-24-2013