Lodging Industry Investment Council "Top 10" from Meet the Money 2011

8/6/2019 Lodging Industry Investment Council "Top 10" from Meet the Money 2011

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2 0 1 1 B R I D G I N G T H E G A P A N D F A C I L I T A T I N G T H E

The 2011 LIIC Top Ten

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CEO and FounderHREC Hospitality Real Estate Counselors


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2 0 1 1 THE LI IC TOP TEN

94% of LIIC think tank believe that average roomrate levels will grow in the next year (39% forecast

over 5%). 89% of responders anticipate occupancy increases

for the lodging industry.

10 Occupancy & ADR FundamentalsContinue to Improve:


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More than half of respondents believe equity rateswill be stable (remain the same).

The remaining 50% of respondents are equally splitbetween increases and decreases.

9 Equity Return Rates Are Stabilizing:

Occupancy & ADR Fundamentals Continue to Improve10



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58% believe hotel interest rates (senior debt) willincrease over the next 12 months; with manyconcerned about interest rate increases impacting

short-term/exit strategies. Flip side, 68% of respondents believe loan/value

ratios are also increasing.

8 Interest Rates to Rise:

Equity Return Rates Are StabilizingOccupancy & ADR Fundamentals Continue to Improve10

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Ability to acquire debt financing appears to beimproving.

48% of respondents believe that they will be able touse acquisition debt financing to leverage dealsover the next twelve months.

7 Acquisition Debt Returning?

Interest Rates to Rise


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For the first time in ten years of surveys, investorsare split: REITs (public equity) vs. Private Equity.

6 REIT Envy & Bitterness

Acquisition Debt Returning?Interest Rates to Rise


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LIIC members solidly believe we are in the beginningof a new cycle.

51% of respondents say we are playing in innings 1 or 2.

46% of respondents say in innings 3 or 4.

Concerns: inflation, real job growth, escalating operatingcosts and oil prices.

5 Its a New Ballgame!:

REIT Envy & BitternessAcquisition Debt Returning?Interest Rates to Rise


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In regards to hotel asset sales volume for Budget 2011 vs.Forecast 2012:

39% believe volume will grow over 20%.

29% believe volume will grow 10% to 20%.

26% believe volume will grow 5% to 10%.

4 Lodging Transaction Volume to IncreaseDramatically:

Its a New Ballgame!REIT Envy & Bitterness



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Sharp contrast to 2010:

46% believe quality of hotel product on the market isexcellent/above average.

81% believe hotel real property on market is average orexcellent/above average quality.

46% believe quantityof product is below average or low.

3 Better Quality Hotel Product Available, IfYou Can Get It:

Lodging Transaction Volume to Increase DramaticallyIts a New Ballgame!REIT Envy & Bitterness



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98% of respondents believe that hotel real estate valueswill increase over the next 12 months, with 61% of totalresponders predicting a significant increase of over 5%.

Luxury hotel category appears to be poised for thegreatest value growth in the coming year.

2 Lodging Real Property Values Are Only Going Up:

Better Quality Hotel Product Available, If You Can Get It




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Investment market continues to trend upwards due to improving revenuefundamentals, increasing availability of debt financing, and continuedstrong interest from equity investors.

39% of respondents believe values will peak in 2015.

29% of respondents believe values will peak in 2014.

24% of respondents believe values will not peak until 2016 or beyond.

1 Hotel Investment Market to Peak in 2015:

Lodging Real Property Values Are Only Going UpBetter Quality Hotel Product Available, If You Can Get It




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1 Hotel Investment Market to Peak in 2015

Lodging Real Property Values Are Only Going Up

Better Quality Hotel Product Available, If You Can Get It

Lodging Transaction Volume to Increase Dramatically

Its a New Ballgame!

REIT Envy & Bitterness


Equity Return Rates Are Stabilizing

Occupancy & ADR Fundamentals Continue to Improve



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The 2011 LIIC Top TenFor a copy of this survey presentation, please send an email to:

Mike Cahill

[email protected]

For more information on LIIC, please see our website:

www.liic.ws

Lodging Industry Investment Council "Top 10" from Meet the Money 2011

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