Monday February 10th, 2014 - 10:52AM
DENVER & ORLANDO—HREC Investment Advisors has released its study of hotel transactions in the Greater Orlando area for 2013. The study covers over 500 hotels located in Orange, Osceola, Seminole, Polk and Lake Counties.
The HREC study revealed that a total of 45 hotels changed ownership in 2013, up from 42 in 2012.
Regarding the single-asset sales:
Aggregate sales volume in 2013 was $890 million vs. $240 million in 2012.
Aggregate sales volume in 2013 after deducting for the $717-million sale of the Peabody to Hyatt was just $173 million.
Average transaction size in 2013 (after subtracting for the Peabody sale) was $6.9 million vs. $8 million in 2012.
Median transaction size in 2013 (after subtracting for the Peabody sale) was $4.7 million vs. $3.3 million in 2012.
The average price per guestroom in 2013 (after subtracting for the Peabody sale) was $35,300 vs. $40,800 in 2012.
By sub-market, the International Drive are has been the most active over the past year with combined transaction volume of $720 million. This was followed by Lake Buena Vista ($55 million) and Orlando North ($30 million). The Orlando South and Kissimmee East submarkets were the most active as measured by number of transactions: each submarket had five sales in 2013.
HREC Investment Advisors brokered over one third of the aggregate deal volume (exclusive of the Peabody transaction, which was not a brokered sale). The company also had top two single-asset sales (the Embassy Suites Lake Buena Vista and the Sheraton Orlando North), after the Peabody, and had four of the top 10 sales in the area.
Last year was also an active one for "Corporate/Portfolio" transactions, which involved 16 properties in six separate transactions totaling $185 million. Likewise, a number of area hotels were affected by two Initial Public Offerings (Hilton Hotels & Resorts and Extended Stay America, both of which were spun off from Blackstone).
Paul Sexton, head of HREC's Orlando office, said in a statement: "With the passing 2013, we have entered into a different phase of the market. No longer are hotel sales dominated by highly distressed assets. As exemplified by Hyatt's acquisition of the Peabody, we are going to start seeing more acquisitions by companies that want to be in Orlando for defined strategic purposes."