Hotel investments looking more sol

Shelling out $2.9 billion for properties across the country, investors are demonstrating confidence that the hotel sector rebounded in the first half of the year, according to CoStar Group. The uptick in sales is occurring after the hospitality sector, hit by dramatic declines in revenue per available room, or revpar, saw property sale prices decrease more than any other commercial property category. But now revpar declines have waned and hotel prices are starting to firm up after falling as much as 50 percent from their 2006 to 2007 peaks. Investors seem intent on taking advantage of bottom-of-the-cycle prices to establish a foothold in the recovering market, although most properties are trading well below replacement costs and historical valuations. Sellers, meanwhile, are cashing in on the dearth of quality product on the market, improved borrowing conditions and the willingness of buyers to accept lower initial yields. However, many of these deals involve distressed properties. TRD