ALIS 2016
The Americas Lodging Investment Summit (ALIS) event in Los Angeles was reported to be a record breaker with more than 3000 registered delegates for the January 2016 event. Positivity at the conference was tempered compared to the positivity at the Lodging Conference in October due to where we are in the investment cycle. The theme of the event, “Where’s the Peak?” mirrored the question that has remained for several years in the minds of investors and explored the ability of the industry to maintain its long standing RevPAR growth. Information garnered from discussions with other attendees and presentations show many of the investors and banks are beginning to underwrite their acquisitions with higher Cap Rates. With newly completed development around the country and more on the horizon, the cycle is assumed to flatten in the coming years; however, the immediate outlook still remains good. RevPAR growth has been consistent for a long time and it looks like even with a slow down, hotels will remain a good investment vehicle.
So, is it time to buy or to sell? The answer is both. The last several years have seen amazing deals that have broken value barriers from foreign and domestic investors. With truckloads of money coming in to the country and quickly rising values, selling is an attractive option. On the investment side, historically hard-to-enter markets have seen record low Cap Rates making now a good time to invest. Other factors affecting investment include low oil prices resulting in more domestic travel and higher occupancy, low interest rates, and high demand for rooms leading to stronger ADR.
Those willing to consider selling now will likely get some of the highest prices while selling at the peak. The only cautionary consideration is what to exchange it with because finding a good site or hotel is one of the biggest challenges of the day. For those that time it right on their respective markets there is a lot of money to be made by selling in the next 6-18 months.
As a final note on ALIS, I would like to give praise to my friends that participated in Shatterproof. This year over a million dollars were raised in the fight against alcohol and drug addiction. For those wanting to donate or to learn more, please visit the website at www.shatterproof.com.
Brian Resendez, Senior Advisor – Hotels and Land