Wednesday, August 8, 2007

Jones Lang LaSalle on hotel economics - supply....demand

I know I sound like Father Guido Sarducci again (see here if you don't know what I mean). And this come just after I laughed about predicted $400-500 hotel rates in Chicago in a few years (yes, I still laugh at it, BTW). But when global buyers outnumber sellers by 4 to 1 that is a fairly decent indicator that purchase and sale prices in this red-hot market sector will continue rising.

Case in point: Bud Cataldo and Roy Disney's family recently flipped the Amalfi Hotel at a 12% profit in just seven months of ownership. Nice work if you can get it. And the profit could be higher depending on what costs were allocated to intangibles (the profit is based only on values culled from the public records). And if you do the research, you will find this is not an isolated transaction. There was at least one other similar flip in River North last year, IIRC.