Posted by yo on May 08, 2008 at 11:54:43:
I think you’d be looking at 12% - 14%. Much less than that and why bother? Be careful, I think the values of hotels have peaked. They’ve been very popular the last several years due to increases in ADR’s.
Cap Rate for Hotels - Posted by Sean
Posted by Sean on May 07, 2008 at 09:18:39:
Hello,
Looking at a 76 room hotel, near summer resort area. I’ll spare all of the details I have about the deal (yes, I’ve read all of the archives pertaining to hotel purchases and some of the obstacles that are out there). My main question is what kind of CAP rates get a seasoned investor excited about a hotel property? This is a stable resort, with a solid history. It does have upside with rooms available even in the peak season, flexible sellers, but would require me to be hands on for awhile.
Appreciate your thoughts.
Sean
Re: Cap Rate for Hotels - Posted by Tim
Posted by Tim on May 23, 2008 at 22:36:25:
I finance hotels and worked in the industry for 14 years. Recently, I have seen cap rates hovering around 9-11% for flagged properties, in primary and secondary markets.