Indigenous hotel industry can strengthen US commercial real estate sector

There is nothing to see no light at the end of the tunnel; the US commercial real estate sector can be strengthened provided that the indigenous hotel industry adopts the leading role. In accordance with Jones Lang LaSalle, the U.S. hotel industry, being by its first annual increase in demand since 2007, has the requisite competence.

“In the hotel sector, we think that the worst of the decline in hotel fundamentals are being experience in 2009,” said Josh Gelormini, Director of capital markets research for the Americas. It’s better for you to note down that Gelormini was one of three JLL executives who reported on the company’s “U.S. National Economy and Property Market Outlook” during a webinar yesterday. “As rebounds in leisure travel as well as business travel begin to slowly take shape in early 2010 and comparison become more favorable, that’s where we’ll see that increase in demand.”

As indicated by the report, demand is likely to swell by 1.1 percent in 2010, which finally will lead to firmness in average daily rates. Revenue-per-available-room declines will slow down to a great extent in 2010, though it’s still estimated to be down from 2009 levels as a whole. By mid-2010, however, the metric is expected to flatten and record positive growth in year-over-year comparisons. “The latter part of 2010 will mark the start of a new lodging cycle, a period when the investment community will start to transition from the year of realization (2009) to the year of increasing opportunities,” according to the report.

All these indicate the celebrated hotel division of Jones Lang LaSalle is expecting a major increase in U.S. hotel transaction activity next year compared to 2009, and it also hopes that 2011 will bring further increased activity on a more robust scale. On the word of Thomas Fisher, Managing Director for Jones Lang LaSalle Hotels, select-service transactions below US$5 million will be common because they can be financed by local and regional banks, while full-service transactions between US$10 million and US$40 million represent a sweet spot for equity-rich investors.