CBRE Hotels Group announces the sale of six Austin area hotel properties in the first 9 months of 2018, proving Austin is a prime market for investors.
The recently sold hotel properties are Staybridge Suites Austin South, Holiday Inn Express & Suites in Bastrop, Holiday Inn Express & Suites in Hutto, Holiday Inn Express & Suites in Georgetown, Austin Suites Hotel and Econo Lodge Austin.
In addition, Best Western in Marble Falls is under contract.
Michael Yu, Rahul Bijlani, and Dennis Drake represented both the buyers and sellers in these transactions.
According to data provided by Real Capital Analytics, the total number of hotel transactions in Austin MSA this year increased by around 40 percent compared with the same period in 2017.
“In Austin MSA this year, we have closed double the number of transactions of our nearest competitor,” says Dennis Drake, Senior Associate at CBRE.
Across Austin, the total number of hotel rooms increased by about 15 percent in the last two years. This is expected to increase by another 10 -15 percent in the next two years. Meanwhile, demand from consumers is only increasing at a rate of around 5-6 percent a year.
“Although there is a lot of new hotel construction in Austin, it still has the highest average revenue per available room of any major city in Texas, which is drawing buyers to the area despite the increased supply on the market,” continues Mr. Drake.
“As the supply of new hotel rooms catches up with demand, we are seeing some sellers begin to diversify out of Central Texas,” says Michael Yu, Senior Vice President at CBRE. “This is creating an opportunity for international and out-of-state buyers to gain a foothold in the market.”
Investors in some of these older hotel assets are also finding novel ways to reposition these properties.
“Due to the shortage of affordable housing in Austin, two of the properties we sold this year are slated to be converted into apartment complexes,” said Rahul Bijlani, Senior Vice President at CBRE.
“Older properties are feeling most of the impact of the new supply on the market as they work harder to compete,” continues Mr. Drake. “However, as Austin is one of the fastest growing cities in the United States, these new investors are confident that it is just a matter of time before the local hotel market stabilizes and resumes its rapid growth.”
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.