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Hotel Capitalization Rates Moderate Slightly

According to USRC Hotel Investor Survey Winter 2016


/EINPresswire.com/ -- COLUMBUS, OH --(Marketwired - March 14, 2016) - US Realty Consultants, Inc. has released its Winter 2016 Hotel Investor Survey, which the company has provided for over twenty years.

The results of our survey continue to show strength in investor interest in the hotel sector, but overall investment parameters moderated slightly from the very strong Mid-Year 2015 results. Volatility in many investment markets, dramatically lower oil prices, and a general questioning of the direction of duration of future growth all led to some increased caution. Both discount rates and going in capitalization rates increased by 30 basis points since the last survey for full-service hotels, with the limited-service segment showing slightly less increase.

It is important to note, however, that these increases are against a backdrop of extraordinarily low rates in the recent surveys. In fact, full-service hotel rates in our previous Mid-Year 2015 survey were the lowest in the twenty-plus history of the USRC Hotel Investor Survey.

Overall yield expectations are inching up, while at the same time, despite uncertainty, ADR growth expectations are actually improving. The average expected ADR growth rate increased 30 basis points from the last survey for both full-service and limited-service hotels.

The complete survey, including data on capitalization rates, discount rates, ADR and expense growth expectations, marketing time, and other data for both full-service and limited-service hotels, can be ordered through the company's website at www.usrc.com, and clicking "Publications."

Jeffrey H. Walker, MAI, CRE is Principal and Managing Director of US Realty Consultants. He is a 1985 graduate of James Madison University and has been involved in the hotel and restaurant industries since the 1970's. He spent much of his early career with Hyatt Hotels and Resorts, and has been a hotel consultant since 1992. He is involved with hundreds of hotel analyses annually for national lenders and major institutional clients, and is a frequent speaker at national conventions. He can be reached at 614-221-9494 (ext 150) or at jwalker@usrc.com.

Jeffrey H. Walker
MAI, CRE
614-221-9494 (ext 150)
Email contact


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