Hotels are outpacing office and retail buildings in attracting investors' capital, especially among Real Estate Investment Trusts (REITs), according to
Bloomberg.com, which cites Minneapolis' Hilton hotel as an example:
"REITs may be the primary buyers of hotels as they come on the market because 'they are fairly well capitalized and have access to attractively priced capital,' said John Arabia, managing director at Green Street Advisors, a Newport Beach, California-based real estate research company.
"Sunstone last month acquired Miami Beach's Royal Palm hotel in a foreclosure auction for about $117 million. LaSalle Hotel Properties, a REIT that focuses on upscale lodging, last week said it bought its first hotel in San Francisco as well as two in Philadelphia for a total of $292.5 million. DiamondRock Hospitality Co. in May agreed to buy the 821-room Hilton Minneapolis for about $155.5 million, and Host Hotels said in July it's seeking deals in the U.S., Europe, and Asia.
"'Publicly traded REITs will be a significant buyer of hotels over the next few years,' Arabia said. 'It's now REITs that will have their day in sun.'"
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