After Blackstone’s acquisition, private equity poised to play big in hotel investment market

New York /
Dec.December 07, 2012 05:30 PM

Private equity players are likely to become the most active buyers in the hotel investment market, following Blackstone’s $1.2 billion acquisition this week of Apple, a hotel REIT that owns brands such as Hilton Garden Inn and Courtyard By Marriott, CoStar Group reported. The buy gives Blackstone a total of approximately 200,000 hotel rooms, or about 4 percent of the nearly 5 million hotel rooms in America. Nearly half of Blackstone’s rooms came from the firm’s $1.9 billion acquisition of the Motel 6 chain in May.

The buy has investment analysts predicting more of the same in 2013, as private equity firms take advantage of the improving debt market for hotels. Currently the hotel investment market is on pace to reach $15 billion this year and another strong rally of transactions are expected next year, according to Lauro Ferroni, vice president of research and strategic advisory of the Americas for Jones Lang LaSalle.

Debt availability for acquisitions is expected to reach its highest level since 2007, with loans available from a variety of sources, including commercial banks, CMBS, mortgage REITs and debt funds, Ferroni said, pushing private-equity buyers like Blackstone to increase their activity.

At least three other big hotel deals have been done this week with RLJ Lodging Trust announcing a $71.6 million deal for  the 231-room Hilton Cabana Miami Beach, Loews Hotels & Resorts agreeing to buy the 356-room Madison Hotel in Washington, D.C and the Washington, D.C.-based Modus Hotels’ acquisition of the 97-suite Brookshire Suites in downtown Baltimore. [CoStar]Christopher Cameron

 

Related Articles

arrow_forward_ios
Maefield Development's Mark Siffin and 20 Times Square (aka 701 Seventh Avenue) (Getty, Edition Hotels)
Massive loan on Maefield’s 20 Times Square in trouble
Massive loan on Maefield’s 20 Times Square in trouble
From left: 608 Fifth Avenue, 22 North Loop Road, 38 West 36th Street (608 Fifth, Weiss/Manfredi, Morphosis, and Handel Architects, Apartments, Getty)
Top 10 Manhattan loans: Big lending enters deep freeze
Top 10 Manhattan loans: Big lending enters deep freeze
Sonesta Hotels’ John Murray and The Shelburne Hotel (Illustration by Kevin Cifuentes for The Real Deal with Getty Images, Affinia, Sonesta)
TRD Pro: Biggest hotel sales of the past year
TRD Pro: Biggest hotel sales of the past year
Empire Capital Holdings' Josh Rahmani, Hakimian Capital's Michael Hakimian, RXR's Scott Rechler and 1330 6th Avenue (Getty, Hakimian Capital, Empire Capital Holdings, 1330aofa.com)
Empire Capital, partners close on $320M deal for 1330 Sixth Ave
Empire Capital, partners close on $320M deal for 1330 Sixth Ave
A photo illustration of Blackstone president Jon Gray (Getty, Blackstone)
Blackstone’s REIT cools off after acquisition flurry
Blackstone’s REIT cools off after acquisition flurry
(Photo Illustration by The Real Deal with Getty)
Pension funds pull back on commercial real estate
Pension funds pull back on commercial real estate
569 Lexington Avenue (Doubletree Metropolitan, Getty)
Lights out: Why more than 10,000 hotel rooms remain closed
Lights out: Why more than 10,000 hotel rooms remain closed
Blackstone's Stephen Schwarzman and Jonathan Gray (Illustration by Kevin Cifuentes for The Real Deal with Getty Images)
Blackstone’s quarterly profit drops to near zero
Blackstone’s quarterly profit drops to near zero
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...