Industry News
April 15, 20242 min read

Insights and Opportunities: Navigating Trends in Middle-Market Hotel Investment Sales

Finance Real Estate & Investment
By Michael Yu, Vice Chairman, CBRE Hotels, Investment Sales

As we navigate the ever-changing landscape of the hospitality real estate market, our team at CBRE Hotels remains committed to providing you with the insights and guidance you need to make informed decisions. In this edition of our newsletter, we'd like to share some key observations from the front lines and offer our perspective on what lies ahead.

Some of the most significant trends I've noticed in middle-market hotel investment sales, where we are the market leader, in recent months:

  • Smaller assets under $30 million are outperforming larger properties, with bidding wars becoming more common and pricing holding up better.
  • Financial pressures are leading to an increase in the number of assets coming to market, but loan defaults remain low, indicating that the market hasn't reached a critical point yet.
  • Clean deals with decent cash flow are a rarity, and therefore demanding a premium.
  • The lending market for hotel assets remains active, albeit expensive, but recent changes to SBA loan programs have significantly increased borrower eligibility providing relief for investors.

We believe investors should remain cautious and selective in their approach. Downside surprises are more likely than catalysts for upside, given that markets have already priced in optimistic expectations.

However, we also see opportunities for well-informed investors who can navigate the challenges and identify the right deals. Our global reach and local expertise, combined with our data-driven approach, position us to be your chosen advisor in this complex sector of the investment market.

We invite you to leverage our knowledge and experience to make the most of the opportunities that exist in the current landscape. Whether you're considering an acquisition, recapitalization, or execution of a PIP project, our team is here to help you achieve your goals.

Don't hesitate to reach out to any member of our CBRE Hotels team for a more in-depth discussion about your specific needs and how we can support you in this dynamic market.

Michael Yu
Michael Yu
Vice Chairman, CBRE Hotels, Investment Sales
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CBRE Hotels

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Atlanta, GA 30326
United States

Phone: (404) 812-5024
pip.cbrehotels.com