NEW YORK? Sonnenblick-Goldman Co. is forecasting that U.S. hotel companies will be more active throughout Europe in 2000, and that European investors will continue to target high-end U.S. properties. Asia will also become more of an investment focus for Americans, as properties there ?begin to shake loose.? These are some of the predictions of Arthur Adler, managing director of Sonnenblick-Goldman Co.?s Lodging and Leisure Group, who was on hand last month with his colleagues to spell out the future of the commercial real estate market for 2000. ?We will see more activity in Europe and Asia in 2000,? said Adler. ?Activity in Europe will accelerate as brands seek to establish critical mass there.? Adler noted that year-to-date, there ?were 27 major hotel transactions in Europe compared to 60 here.? The two markets in Europe ?characterized as good fundamental investments are the U.K. and France,? said Adler, noting that excluding the Savoy Group transaction, over 50% of transactions in Europe in 1999 took place in the U.K. As for Asia, Adler said that ?lodging transactions will increase as owners become motivated to sell and as values increase.? He noted that ?there is significant interest by opportunity funds and lodging companies, but that there is limited availability of product.? Overall, ?economies are generally improving, particularly in Japan, Korea, Hong Kong and Singapore. Opportunities vary, depending upon local banking regulations, bankruptcy laws and economic conditions.? Adler said that while the U.S. will remain more attractive than Europe for investors, it ?is more of a stagnant atmosphere,? due in part to less merger and acquisition activity. The entrance of private and institutional investor equity into the hotel sector was also noted by Adler, noting that ?public equity is non-existent.? Other traits of the U.S. investment market, he said, include a generally higher cost of capital; slightly higher capitalization rates; a narrowing of the ?bid-ask? spread; fewer, but ?higher quality? property transactions; a more ?normalized? property market; and less mergers and acquisitions activity. In the U.S. investment market there is a ?flight to quality,? said Adler. ?The investment focus is on luxury and full service properties. It?s a strong market with high barrier to entry, which will mitigate the supply issue.? Investments overall, he said, will require more equity, about 35% to 40%.