Jones Lang LaSalle Hotels : Los Angeles Hotel Sales Spike 77% to $550 Million; Demand Continues (United States)
|
|
Jones Lang LaSalle Hotels : Los Angeles Hotel Sales Spike 77% to $550 Million; Demand Continues (United States)
|
Category: North America & West Indies / Carribean islands - United States - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2011-11-03
Jones Lang LaSalle Hotels says investors are acknowledging the maturation of Los Angeles submarkets
Jones Lang LaSalle Hotels today announced that hotel transaction volume in Los Angeles County has increased by 77 percent year-to-date 2011 from the prior year period. The firm’s research report, Hotel Intelligence Los Angeles, provides an analysis of the hotel investment market showcasing the current transactions environment, demand generators and supply. While the transaction market is likely to slow for the remainder of the year, the report highlights four of the top reasons why the transactions market will remain active.
“The sustained recovery we are seeing in Los Angeles is fuelled by an influx of foreign investment coupled with the demand for high-quality and well-located projects throughout the city,” said John Strauss, Managing Director for Jones Lang LaSalle Hotels in Los Angeles. “The revitalization of the downtown Los Angeles market, along with an increased volume of international and overnight visitors continues to be a key driver for the economy.”
Downtown Los Angeles is in high demand due to revitalization
Historically, Los Angeles’ most well-known demand drivers have been Hollywood studios, Santa Monica beaches and Beverly Hills shopping. However, downtown Los Angeles has come into its own following a decade-long revitalization, which has transformed it into a 24/7 urban submarket. An entertainment, dining and nightlife hub has emerged within the $2.5 billion L.A. Live project containing the Nokia Theatre and Grammy Museum. Additional developments such as the nearly $1 billion infusion into metro and light rail projects and a new NFL Stadium slated for completion in 2015, have attracted new residents -- by an increase of 15 percent within the last year. Downtown Los Angeles will continue to be a major attraction for both leisure and business tourists, as well as locals.
Influx of foreign investment
Major West Coast cities, including Los Angeles, have been heavily influenced by an influx of foreign investment, sovereign wealth funds, corporate, and high-net-worth-individuals. The EB-5 Immigrant Investor Program has become more prevalent, especially in Los Angeles, in the last few years. Hotels are an attractive option for EB-5 investors because of the amount of jobs hotels create relative to other real estate classes. EB-5 investments have lead to projects like the financing of the W, Hollywood, which received $20 million in funds, and similarly, the Courtyard and Residence Inn project adjacent to L.A. Live.
Strauss added, “Upon the completion of the many high-profile downtown Los Angles projects, the market is expected to experience an additional boost in lodging fundamentals beginning in 2014 as visitation to the city increases.”
Number of overnight visitors hits a 10-year high
In 2011, Los Angeles is projected to host more overnight visitors than it has in a decade – an increase bolstered by strong international tourism specifically from Australia, Great Britain and Japan. International visitors represent one fifth of the city’s tourist arrivals and generate more than one third of tourist spending. The number of foreign visitors last year increased 18 percent, providing a boost to the Los Angeles hotel market.
High-quality projects fuel development
The downtown Los Angeles market continues to see a flood of foreign and domestic investment infused into major development projects. Korean Air recently announced plans to demolish the 896-room Wilshire Grand Hotel and replace it with a $1 billion mixed-use complex with office, retail, and residential components, along with a luxury hotel. The existing hotel is slated to close at the end of 2011 and the 1.8 million square-foot mixed-use project is targeted for completion in 2014.
“Investors are eyeing nearby submarkets as the lack of new hotel supply in downtown Los Angeles combined with upward trajectory of downtown economic fundamentals creates a competitive environment for new hospitality investment opportunities,” Strauss said. “Following the significant increase in transaction volume experienced in 2011, the Los Angeles market is likely to slow in 2012 due to limited supply available for acquisitions. Despite economic volatility, lodging fundamentals are expected increase, and revenue per available room (RevPAR) is on track to continue record recording growth, albeit in the single digits, in 2012.”
About Jones Lang LaSalle Hotels
Jones Lang LaSalle Hotels, the first and leading global hotel investment services firm, is uniquely positioned to provide the depth and breadth of advice required by hotel investor and operator clients, through a robust and integrated local network. In 2010, Jones Lang LaSalle Hotels provided sale, purchase and financing advice on $4.1 billion worth of transactions globally. In addition, advisory and valuation services were provided on over 1,000 assignments. The global team comprises over 225 hotel specialists, operating from 39 offices in 20 countries. The firm's advice is supported by a dedicated global research team, which produced 70 publications in 2010 in addition to client research. Jones Lang LaSalle Hotels' services span the hospitality spectrum; from luxury single assets and large portfolios to select service and budget hotels, resorts and pubs. Services include investment sales, mergers and acquisitions, capital raising, valuation and appraisal, asset management, strategic planning, operator selection, management contract negotiation, consulting, industry research and project development services.
|
|
