Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm, closed 78 hotel transactions in 2012 totaling $289 million, according to Gregory A. LaBerge, national director of the firm’s National Hospitality Group (NHG).
“The hospitality industry is beginning a phase that could very well feature the best industry fundamentals in decades,” says LaBerge. “Last year was Marcus & Millichap’s best year ever providing hospitality investment services to clients, and it was also one of the best operational years for hotels in recent memory.”
Marquee transactions for Marcus & Millichap’s NHG last year included the sale of a pair of Hilton Garden Inns in Birmingham, Ala. that traded for a total of $22.1 million. The Hilton Garden Inn, Liberty Park sold for $11.9 million and the Hilton Garden Inn, Lakeshore brought $10.2 million.
At the other end of the spectrum, investors also demonstrated demand for distressed hospitality assets. The NHG arranged the sale of a 120-room lender-owned Holiday Inn in Frisco, Texas that received 26 offers in less than a week. The property commanded a 25 percent premium over the list price and closed to an out-of-state owner/investor five days after going under contract.
The NHG also arranged the sale of the Crystal Casino Hotel, a 250-room full-service hotel and casino situated on 15 acres along the Alameda Corridor between Long Beach, Calif. and Los Angeles in Compton, Calif. The sales price of $16.5 million equates to $66,000 per room.
“In 2012, we saw many different types of buyers entering the market for the first time, and seasoned investors returning from the sidelines,” continues LaBerge. “Leveraging those relationships, our national team of hospitality investment professionals generated more than 960 offers on behalf of clients, a rate of nearly four offers every business day.”
“This year, we expect to see continued investor demand for high-quality hospitality investments, some of it coming from buyers entering the market from other product types,” LaBerge concludes. “As a national firm that serves clients across multiple asset classes, we have cross-platform investors who want to take advantage of the hospitality sector’s higher yields.”
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With more than 1,000 investment professionals in offices nationwide, Marcus & Millichap Real Estate Investment Services is the largest firm specializing in commercial real estate investment services in the nation. Marcus & Millichap closed 6,149 transactions in 2012, the highest of any commercial real estate brokerage firm. Founded in 1971, the firm has perfected a powerful system for marketing properties that combines product specialization, local market expertise, the industry’s most comprehensive research, state-of-the-art technology and relationships with the largest pool of qualified investors nationally.