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Survey: Europeans buying more hotels than Japanese.

According to an extensive analysis of hotel transactions conducted by Hospitality Valuation Services and HVS Financial Services, European investors made a strong entry in the U.S. hotel investment market over the past year, accounting for 32 percent of the buyers surveyed. By comparison, Japanese buyers accounted for only 24 percent of the hotel transactions reviewed in the analysis.

"This occurrence represents a major shift from past years when the JApanese investment community was much more of a dominant force in the U.S. hotel investment market," explained Michael Cahill, senior vice president with Hospitality Valuation Services and one of the survey's developers.

The survey revealed at least 25 major transactions involving U.S. hotels with prices of more than $10 million. Of particular note, foreign investors purchased roughly 70 percent of major U.S. hotels sold over the last year.

Of the European buyers, English investors were involved in two purchases. German, French, Belgian, Italian, Swiss and kish investors each recorded one major U.S. hotel purchase.

Although their activity in the U.S. hotel investment market has slowed, the Japanese are still major players who purchased six U.S. lodging facilities last year. "Of particular interest is that virtually all of the Japanese hotel purchases involved properties with golf facilities," noted Glenn Carlin, senior vice president of HVS Financial Services and one of the survey's developers.

The highest per-room sales price recorded in the survey was $200,000 for the Ma Maison Sofitel in Los Angeles. Of the hotels sold, 28% were located in Southern Califorma and 24 percent were located in Florida. Thirty-two percent of the transactions were completed with U.S. sources of capita]; half of which involvedthe same opportunity (vulture) fund.

Of the sellers represented in the survey, 40 percent were financial institutions attempting to reduce their real estate exposure in hotels. Various limited partnerships and hotel chains were also represented. Over three quarters of the hotels sold maintained nationally recognized chain affiliatiions at the time of the sale.

According to Cahm, "The survey reveals that while the types of investors maybe changing, transactions continue to take place."
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Title Annotation:US hotels
Publication:Real Estate Weekly
Date:Oct 2, 1991
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