U.S. Lodging Investment Outlook – Q4 2016

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U.S. Lodging Investment Outlook – Q4 2016

Despite supply increases, political uncertainty and softening lodging fundamentals in some markets, U.S. hotel transactions accounted for nearly 50 percent of global sales in 2016

Transaction activity in the U.S. lodging market totaled $29.1 billion in 2016, with offshore groups accounting for more than 40 percent of all purchases. U.S. hotels posted RevPAR growth of 3.2 percent and reached a new occupancy record of 65.5 percent.

This year, domestic investors are expected to become bigger players in U.S. hotel deals, including REITs and private equity funds. JLL expects 2017 to return to more normalized levels of transaction volume and buyer composition and anticipates continued merger and acquisition activity ahead.

  • Boston, Washington, D.C., and Atlanta, along with several smaller markets on the West Coast, are expected to fare quite well in 2017 as they demonstrated above-average growth last year. ​​ 
  • The hotel supply pipeline is continuing to increase in the U.S., with select-service hotels accounting for the bulk of new rooms under construction.
  • 2016 transaction volumes were primarily driven by the sale of single, full-service hotel assets. Offshore hotel groups were involved in nearly half of all hotel sales. 
  • Thirty percent of branded, full-service hotel rooms have been involved in brand M&A activity since 2014. That trend is expected to continue throughout 2017. 
  • Cap rates have followed an upward trend over the past two years and will likely see continued upward pressure in 2017. 

​​Download the U.S. Lodging Investment Outlook report