Hotel

naimartens

Hotel

Prepared by:

Hotel

SMARTbrief


2013

IT IS TIME TO BE OPTIMISTIC

While post-recession uncertainty still persists and many impending economic

issues (spending cuts and the debt ceiling) have been left unsettled, 2013

is opening with increasing investor interest. There is reasonable job creation,

the stock market is strong due to increasing corporate profits, the housing

market is showing signs of turning around and investor interest in the hospitality

industry is second only to the multifamily sector. Deal flow is accelerating

and with improved operations, access to capital and low interest rates it

is expected to do nothing but gain speed.

• Demand is at record levels (91.7 million rooms sold in December)*

• Demand increases will continue to be greater than Supply (1.8% vs. 1.0% in 2013

and 2.8% vs. 1.5% in 2014)*

• Financing is loosening with options such as SBA 504 and 7a plans, institutional

lenders in major markets and local banks are opening up to more hospitality loans

• Average Daily Rate will drive growth (4.9% increase in 2013 and 4.6% in 2014)*

• Expected Leveraged Internal Rates of Return are in the upper-teen’s

• Opportunities exist in properties with extensive PIP lists, those needing reflagging

and the slowing of ‘extend and pretend’

During the recent NAI Global conference in Las Vegas we had the opportunity to visit

with hospitality investors and brokers from across the country. The one common theme

was that these favorable trends continue to fuel investor demand. If you are considering

a disposition, please let us know and we will provide you with a no-strings-attached

opinion of value and will work with you on how best to position your property for maximum

value. If you are looking to acquire, let us know your investment criteria and

through our hospitality practice group partners we will find what you are looking for.

Best wishes for a successful 2013 and if we can help in any way, please don’t hesitate

to give us a call.

MARKET HIGHLIGHTS

Region Month OCCUPANCY ADR REV PAR

(% Chg/Prior Yr) (% Chg/Prior Yr) (% Chg/Prior Yr)

Wichita MSA Nov 54.00% -0.80% $83.12 0.60% $44.85 -0.10%

Wichita MSA Nov YTD 60.70% 0.80% $83.98 1.60% $51.00 2.40%

Total US Nov 56.50% 1.80% $104.63 3.50% $59.10 5.40%

Total US Dec 49.10% 3.20% $104.43 4.30% $51.22 0.70%

Total US Dec YTD 61.40% 2.50% $106.10 4.20% $65.17 6.80%

*Source: STR


Timeline

KANSAS OPENINGS, CLOSURES

& CONVERSIONS

June 2012

The City of Wichita bought the Super 8 hotel at 527 S. Webb

Road for $4.1 million. The city bought the 119-room property as

part of its ongoing property acquisitions for the extension of Kellogg

to Greenwich Road.

The Ambassador Hotel opened in downtown Kansas City.

August 2012

Wichita Inn East becomes a Super 8. The switch was made

after the Super 8 on the south side of Kellogg (mentioned above)

was purchased and closed by the city.

The Hilton Garden Inn opened in Olathe off of I-35 and 119th

Street.

The 80-room Fairfield Inn & Suites opened in Hutchinson

near 11th and Lorraine.

September 2012

Holiday Inn Express opened next to the KU Medical Center

in downtown Kansas City.

The Best Western Plus Midwest Inn & Suites opened in Salina at I-135 and

Schilling Road. This was previously a Baymont Inn & Suites.

October 2012

Cobblestone Inn & Suites opened in Anthony, Kansas. This new brand

opens hotels in small, under served markets, averaging 36 rooms.

The 150-room Hampton Inn & Suites attached to the Kansas Star Casino

opened in Mulvane. Future plans include opening an additional 150 rooms at

the casino site in 2014 or 2015.

Holiday Inn Express opened in Overland Park at I-69 and 135th Street.

December 2012

The $22.5 million, 117-room Ambassador Hotel opened. The historic

14-story boutique hotel is located at the corner of Douglas and Broadway in

downtown Wichita.

Summer 2013

A Holiday Inn Express is expected to open in northeast Wichita next to the Staybridge

Suites.

October 2013

Best Western will open in Garden City on Kansas Avenue, just south of the Highway

50/83/400 bypass.


New Name

Grubb & Ellis | Martens Commercial Group

is now NAI Martens

Same Company.

Same Dedication.

New Name.

New Opportunities.

NAI Martens has the same talented professionals, now with even

more connections. NAI Global has 5,000-plus agents working in

350 offices across the globe. This network provides a powerful

resource for our clients.

Let us showcase your real estate on a global scale.

NAI Martens

435 South Broadway | Wichita, KS | 67202

(p) 316 262 0000 | (f) 316 262 0235

BuildingKansas.com

A World of Local Knowledge.


Our TeamHOTEL

BROKERAGE

Jeff Walenta

Tom Johnson, CRE

Hospitality Advisor

President

jwalenta@NAIMartens.com tjohnson@NAIMartens.com

HOTEL APPRAISAL

Brian Klahr, MAI

State Cert. Appraiser (KS-MO)

Hotel Specialist

STAY CONNECTED

{

Lee Z. Whyte, MAI

State Cert. Appraiser (KS-MO-CO-TX)

Hotel Specialist

We know the hotel market in the Midwest and are

happy to share information, trends, insights and

more. If you are interested in receiving a free Broker

Price Opinion on your property, contact Jeff Walenta

at (316) 847-4925 or jwalenta@NAIMartens.com.

Sign up for our quarterly hotel e-brief at

BuildingKansas.com

© Copyright 2013 NAI Martens. Reproduction in whole or part is permitted only with the written consent of NAI Martens.

Some of the information contained herein has been gathered from sources deemed reliable however

NAI Martens makes no warranties or representations as to the completeness or accuracy thereof.

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