2014 will be a record year for select-service hotel buys, with low interest rates and a third consecutive year of large RevPAR increases, predicts JLL Hotels managing director Al Calhoun, here with the legendary Frankie Avalon (left) in California. (Forget beach blanket bingo... the party's moved to the hotel pool.) Al's worked in the select-service sector since 1990 and loves that institutional players are finally paying attention to what he's seen for over two decades: diversity, stability, efficiency, and cash-flow dependability. Trends Al sees: cap rates declining nearly 100 bps, and large select-service portfolios trading in the high 7% cap rate range and individual properties in the low 8% range. The number of bids JLL Hotels has received on premium-branded hotel portfolios has increased two-fold.

Source: JLL Hotels

The select-service sector had a pretty spectacular 2013, as seen above. Three players will make up the bulk of 2014's investments, he says: REITs, who want urban, upscale assets in high-barrier-to-entry markets; private equity, which is looking for large portfolios it can leverage up; and local hotel management companies. Al, along with JLL Hotels SVP Mark Fraioli and VP Melvin Chu, just arranged the $24M sale of the four-story, 106-room SpringHill Suites by Marriott Portland Hillsboro on behalf of a W.P. Carey REIT affiliate, Watermark Capital Partners, and Montclair Hotel Investors; the buyer was RLJ Lodging Trust.