Hopeful on Hotels

While 2010 was busy for hotels in receiverships, green shoots are starting to emerge in the sector as the bid-ask spread lessens. Hotel Source is experiencing the growth first hand; it's listed four new hotels in suburban Chicago and Wisconsin so far in 2011.
 
The surge has to do with listings being properly priced, says Hotel Source founder Steven Marx. He and Seth Glickman came out of the operational side of the industry while David Ditmars came from marketing other kinds of real estate. Steve and Seth also own a 114-room Midwest hotel, which helps them gain perspective in the marketplace. The new listings are franchised properties, one in Aurora and the other three in southern Wisconsin.
Their listing process begins with valuing the hotel, which entails extensive analysis and modeling. Because they're seeing a lot moreindividual investors looking into lodging assets, they've developed a targeted database and listing package for each property. Steve says hotels will be a popular investment class in 2011 because of their lack of long-term leases, which means owners may see a rebound from the recession quicker than other asset classes.

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Related Topics: Hotel Source , Seth Glickman
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