Hotel Brokers International Sells 10,000th Property
- Sep 26, 2008
Hotel Brokers International has brokered its 10,000th hotel transaction. The milestone was a $10.2 million package deal of two Holiday Inn Express hotels. The two properties were a 77-unit Holiday Inn Express in Austinburg, Ohio, which sold for $5.6 million, and the 64-unit Holiday Inn Express in Newton Falls, Ohio, which sold for $4.4 million. It was appropriate that HBI achieved the milestone with two mid-market hotels, since that is the lion’s share of transactions the brokerage network completes, H. Brandt Niehaus (pictured), president of HBI and the Louisville, Ky.-based brokerage, Huff, Niehaus & Associates, told CPN at the 2008 Lodging Conference in Phoenix. He said that transaction volume at HBI has remained relatively strong through the first six months of this year, but believes that sales will slow as the market digests the continuing turmoil on Wall Street. Financing for hotel transactions has become more difficult to obtain, but is still available, particularly for hotel transactions below the $10 million to $15 million level, he said. But the industry will likely face some turbulent times in 2009, he said.“I think it will be tougher than people expect,” Niehaus said, adding that owners will have to face slowing RevPar growth over the course of the year. He said he does not see a possible change in capital gains tax rates as a spur to sales. A lot of owners want to stay in the hotel business, and would use a 1031 exchange to buy another hotel after a sale to avoid capital gains taxes, he said. There has not been a great deal of activity from foreign buyers, which some predicted would boost transaction levels, Niehaus said. Although HBI has received numerous inquiries from overseas buyers, “there has not been a lot of action,” he said. One reason may be that while the weakening dollar has made U.S. assets cheaper, some buyers may want to see the dollar strengthen after their purchase to improve their profits, he said. Asmukh Patel and Rakesh Patel were the buyers of the two Holiday Inn Express properties. Liberty Group was the seller, and will continue to manage the hotels. Hotel Brokers International is a hotel brokerage network with some 30 U.S. offices and approximately 100 hotel brokers.