Arik Kislin lends insight into the current hotel market

FOR IMMEDIATE RELEASE
new york city, New York, United States of America (Free-Press-Release.com) September 9, 2010 -- Hotel purchases are increasing faster than deals for office buildings, shopping centers or any other type of U.S. commercial property as rising occupancies and room rates boost the lodging industry.

Sales of hotels jumped 136 percent in the first half of 2010 from a year earlier, the biggest gain among five commercial real estate categories tracked by New York-based Real Capital Analytics Inc. Those deals were based on transactions of at least $5 million and exclude hotels attached to casinos.

Hotels are inherently different from apartment buildings or other types of commercial real estate. Because their space is rented by the night, not the month or year, hotels are a better investment than other properties during a boom and worse during a bust, he said. Hotels can boost rates quickly to take advantage of economic growth, while tenants at offices and retail properties tend to sign multiyear leases.

Income for hotels, meanwhile, is rising. Revenue per available room, or revpar, in the top 25 U.S. markets rose to $73.87 during the first half from $71.08 a year earlier, according to Smith Travel Research Inc. of Hendersonville, Tennessee. Occupancies climbed to 63 percent from 59 percent during the period, while remaining below 2008’s 66 percent.

Sales of hotels totaled $3.19 billion in the first six months of 2010, up from $1.36 billion a year earlier. The 136 percent increase compares with an 82 percent gain in office transactions, a 51 percent advance in apartment deals, a 37 percent climb for retail properties and a 22 percent rise in industrial property sales.

REITs may be the primary buyers of hotels as they come on the market because they are fairly well capitalized and have access to attractively priced capital. Publicly traded REITs will be a significant buyer of hotels over the next few years.

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About Arik Kislin Arik Kislin is a self-made real estate investor, developer and entrepreneur. Arik Kislin is a principal with Linx Industries, a diversified investment company which includes JetFLight International, a Private Aviation Charter and Management Company, The Gansevoort Hotel Group, and Ocean Blue Management. Mr. Kislin began investing in a financial services firm active in the distressed debt market which manages assets in excess of $2 billion. Arik Kislin is a member of the New York Friars Club.

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