florida hotels - lgre.co · most active markets source: real capital analytics, str and colliers...
TRANSCRIPT
Q4
Accelerating success.
Florida Hotels Q4 2017Market Report
Accelerating success.www.colliers.com www.colliers.com
Colliers Hotels team exceeds our clients’ expectations by arranging highly successful transactions across all chain scales and independent hotels. Our Florida lodging practice excels because of our deep experience, local knowledge and investor relationships. Colliers International is a worldwide leader in lodging transactions, financing, valuation and consulting.
Col l iers International Group Inc. (NASDAQ: CIGI; TSX: CIGI) is an industry leading global real estate services company with more than 15,000 skil led professionals operating in 68 countries. With an enterprising culture and significant employee ownership, Col l iers p r o f e s s i o n a l s provide a ful l range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal , valuation and tax consulting; customized research; and thought leadership consulting.
Col l iers professionals think differently, share g r e a t i d e a s a n d offer thoughtful and innovative advice that help clients accelerate their success.
Kent SchwarzExecutive Vice President Colliers Hotels | Florida 1 727 298 5308 [email protected]
View Bio
Rich LillisExecutive Vice President | South Florida National Director, Hotels | USA 1 561 353 3640 [email protected]
View Bio
2017 dollar volume of Florida hotel transactions continued to moderate from its peak in Q1 2015. The average price per room also moderated, dovetailing with the U.S. trend. That said, one of the year’s most notable transactions was Sunstone’s acquisition of the 175-room Oceans Edge Hotel & Marina in Key West for an impressive $1,000,000 per room. The largest transaction was Xenia’s acquisition of the 815-room Hyatt Regency Grand Cypress in Orlando for $205,500,000.
From mid 2013 to mid 2016 Florida hotel cap rates inched up slightly faster than the U.S. average. From late 2016 through 2017 Florida cap rates remained relatively stable while the U.S. continued its rise. 2017 closed with Florida cap rates being only 20 bps higher than the U.S. average.
Florida Transaction Trends
Source: Real Capital Analytics, STR and Colliers International
Change in Sales (Year Over Year)
Average Price Per Room Average Cap Rate (yield)
Yearend Sales By Total
Spotlight On
What do you get when you cross a former fund manager, Jeff Vinik, who is now a businessman, philanthropist, owner of the 717-room Tampa Marriott Waterside and the Tampa Bay Lighting hockey team with Bill Gates’ Cascade Investment? You get a 53-acre, eco-friendly, 9 million square foot, $3 billion redevelopment in downtown Tampa by Strategic Property Partners.
Known as Water Street and located between the Tampa Convention Center and the Channel District the development will include a 519-room JW Marriott, a 157-key five-star hotel with luxury condominiums, a new home for the Museum of Science & Industry, the 13-story University of South Florida Morsani College of Medicine and Heart Institute, thousands of new residential units and 3 million square feet of office, retail and entertainment space. Together, the new JW Marriott and the existing Marriott Waterside will have over 1,200 rooms and 175,000 square feet of meeting and event space.
The first phase of 4 million square feet is underway and will also include the Morsani College of Medicine. This phase will be completed by 2020, prior to the 2021 Super Bowl that will be held in Tampa. Full buildout is expected by 2027.
Water Street and improvements in the adjoining Channel District have prompted another local developer, Liberty Group, to build Tampa’s first dual branded hotel; a 213-room Hampton Inn and Home2 Suites in the Channel District. In 2014 Liberty Group successfully redeveloped an office building into the Aloft Tampa Downtown, which it sold in 2015. The Sheraton Tampa Riverwalk also sold in 2015 followed by the 521-room Hilton Tampa Downtown and 300-room Westin Harbour Island in 2016.
Rendering Water Street Rendering Dual Branded Hampton & Home2 Suites
Source: Real Capital Analytics, STR and Colliers International
Tampa Downtown
Rendering JW Marriott Atrium
$0
$2
$4
$6
$8
$10
Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17
Billi
ons
Rolling 12-mo. Total Quarterly Vol
-100%
100%
300%
500%
700%
Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17
Sales Change
$0
$50
$100
$150
$200
$250
Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17
Thou
sand
s
Florida Hotels US Hotels
3.0%
5.0%
7.0%
9.0%
11.0%
Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17
Florida Hotels US Hotels
Rendering JW Marriott
Florida’s Supply Pipeline
During the fourth quarter, Florida’s pipeline of new hotel projects increased 5.3% over the prior quarter. Jacksonville posted the largest percentage increase in new projects with 38.5%, followed by Melbourne/Titusville and the Panhandle.
The Tampa/St. Pete area experienced the largest drop in the number of new hotels in the development pipeline with a quarter over quarter decline of 10.7%
Most Active Markets
Source: Real Capital Analytics, STR and Colliers International Source: Real Capital Analytics, STR and Colliers International
-10% 0% 10% 20% 30% 40%
Tampa/St. Pete
Daytona
Miami
Fort Lauderdale
WP Beach/Boca Raton
Sarasota/Bradenton
Orlando
Florida Central
Fort Myers/Naples
Florida Panhandle
Melbourne/Titusville
Jacksonville
Allocation of Florida’s Supply Pipeline
Percent Change in Supply Pipeline from Q3 to Q4
Daytona Florida Central Florida Panhandle
Fort Lauderdale Fort Myers/Naples Jacksonville
Melbourne/Titusville Miami Orlando
Sarasota/Bradenton Tampa/St. Pete WP Beach/Boca Raton
Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # PropsMiami/So Fla $653 21 $232 14 $445 28 $710 30Tampa 81 8 6 2 202 9 83 8Orlando 135 12 127 9 367 33 171 15Jacksonville 35 3 0 0 62 8 36 5Tallahassee 21 3 0 0 15 4 23 2Florida Panhandle 11 2 12 1 62 6 39 2Daytona Beach 4 1 45 4 16 4 30 7Fort Myers 0 0 15 2 17 2 58 4Sarasota 0 0 0 0 6 1 11 2Gainesville 6 1 0 0 7 1 21 2
Totals $946 51 $437 32 $1,198 96 $1,181 77
2010 20112008 2009
Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # PropsMiami/So Fla $945 41 $1,693 41 $2,821 55 $2,520 54Tampa 213 15 89 17 600 20 708 41Orlando 318 23 1,032 28 434 20 2,280 45Jacksonville 49 9 96 13 210 7 147 15Tallahassee 12 1 47 5 55 5 60 5Florida Panhandle 24 4 72 10 71 6 21 4Daytona Beach 25 4 51 3 32 5 160 9Fort Myers 26 7 21 3 47 7 111 12Sarasota 69 1 29 3 71 5 33 4Gainesville 15 1 0 0 24 3 84 7
Totals $1,696 106 $3,129 123 $4,364 133 $6,122 196
2012 2013 2014 2015
Vol ($M) # Props Vol ($M) # PropsMiami/So Fla $1,671 25 $585 20Tampa 500 24 542 26Orlando 489 27 518 26Jacksonville 74 10 270 19Tallahassee 16 4 65 9Florida Panhandle 20 4 59 8Daytona Beach 97 5 58 7Fort Myers 12 1 57 5Sarasota 146 11 54 6Gainesville 60 2 43 4
Totals $3,087 113 $2,251 130
2016 2017
-4,500-3,500-2,500-1,500
-500500
1,5002,500
2014 2015 2016 2017
Mill
ions
$
Acq Disp Net
-4,500-3,500-2,500-1,500
-500500
1,5002,500
2014 2015 2016 2017
Mill
ions
$
Acq Disp Net
-4,500-3,500-2,500-1,500
-500500
1,5002,500
2014 2015 2016 2017
Mill
ions
$
Acq Disp Net
-4,500-3,500-2,500-1,500
-500500
1,5002,500
2014 2015 2016 2017
Mill
ions
$
Acq Disp Net
Performance by City
The three South Florida markets continue to be the highest RevPar performing of the tracked major Florida markets; however, in 2017 Orlando become the highest occupancy market in Florida, posting 79.3% annual occupancy. This outpaced Fort Lauderdale’s 77.8% and is the highest occupancy recorded by any major Florida market in the past decade.
Orlando also posted a 5.6% increase in ADR for 2017. This ADR increase coupled with strong occupancy gave it an 8.7% increase in RevPAR for the year. This was the largest percent increase in the major Florida markets and was followed by West Palm-Boca Raton market with 7.0 percent and Melbourne-Titusville with 6.6%.
Average Daily Rate
Occupancy
RevPAR
Cross Border CapitalCross Border Capital kept to the sidelines in 2017 transacting at only 20% of its 2014 peak and 26% of 2016. Canada has continuously been an active cross border player in the Florida market and represented both the largest dollar volume and number of transactions in 2017.
Capital Flows
InstitutionalInstitutional capital was once again a net seller as it has been for the past four years, though to a lesser degree in 2017. It too was mostly on the sidelines for the year and well off its 2015 peak activity.
REIT/ListedAfter bench warming in 2016 REIT/Listed became the largest net acquirer in 2017. Much of this can be attributed to buoyancy in share pricing in late 2016 and stability in 2017.
PrivateOf the four capital groups Private equity has been the most ubiquitous and least volatile. Although modest net sellers in 2017, Private equity represented almost half of all Florida hotel transactions during the year.
Source: Real Capital Analytics, STR and Colliers International Source: Real Capital Analytics, STR and Colliers International
40%
50%
60%
70%
80%
90%
$0
$50
$100
$150
$200
$0
$40
$80
$120
$160
2013-2016
2017
-4,500-3,500-2,500-1,500
-500500
1,5002,500
2014 2015 2016 2017
Mill
ions
$
Acq Disp Net
-4,500-3,500-2,500-1,500
-500500
1,5002,500
2014 2015 2016 2017
Mill
ions
$
Acq Disp Net
-4,500-3,500-2,500-1,500
-500500
1,5002,500
2014 2015 2016 2017
Mill
ions
$
Acq Disp Net
-4,500-3,500-2,500-1,500
-500500
1,5002,500
2014 2015 2016 2017
Mill
ions
$
Acq Disp Net
Performance by City
The three South Florida markets continue to be the highest RevPar performing of the tracked major Florida markets; however, in 2017 Orlando become the highest occupancy market in Florida, posting 79.3% annual occupancy. This outpaced Fort Lauderdale’s 77.8% and is the highest occupancy recorded by any major Florida market in the past decade.
Orlando also posted a 5.6% increase in ADR for 2017. This ADR increase coupled with strong occupancy gave it an 8.7% increase in RevPAR for the year. This was the largest percent increase in the major Florida markets and was followed by West Palm-Boca Raton market with 7.0 percent and Melbourne-Titusville with 6.6%.
Average Daily Rate
Occupancy
RevPAR
Cross Border CapitalCross Border Capital kept to the sidelines in 2017 transacting at only 20% of its 2014 peak and 26% of 2016. Canada has continuously been an active cross border player in the Florida market and represented both the largest dollar volume and number of transactions in 2017.
Capital Flows
InstitutionalInstitutional capital was once again a net seller as it has been for the past four years, though to a lesser degree in 2017. It too was mostly on the sidelines for the year and well off its 2015 peak activity.
REIT/ListedAfter bench warming in 2016 REIT/Listed became the largest net acquirer in 2017. Much of this can be attributed to buoyancy in share pricing in late 2016 and stability in 2017.
PrivateOf the four capital groups Private equity has been the most ubiquitous and least volatile. Although modest net sellers in 2017, Private equity represented almost half of all Florida hotel transactions during the year.
Source: Real Capital Analytics, STR and Colliers International Source: Real Capital Analytics, STR and Colliers International
40%
50%
60%
70%
80%
90%
$0
$50
$100
$150
$200
$0
$40
$80
$120
$160
2013-2016
2017
Florida’s Supply Pipeline
During the fourth quarter, Florida’s pipeline of new hotel projects increased 5.3% over the prior quarter. Jacksonville posted the largest percentage increase in new projects with 38.5%, followed by Melbourne/Titusville and the Panhandle.
The Tampa/St. Pete area experienced the largest drop in the number of new hotels in the development pipeline with a quarter over quarter decline of 10.7%
Most Active Markets
Source: Real Capital Analytics, STR and Colliers International Source: Real Capital Analytics, STR and Colliers International
-10% 0% 10% 20% 30% 40%
Tampa/St. Pete
Daytona
Miami
Fort Lauderdale
WP Beach/Boca Raton
Sarasota/Bradenton
Orlando
Florida Central
Fort Myers/Naples
Florida Panhandle
Melbourne/Titusville
Jacksonville
Allocation of Florida’s Supply Pipeline
Percent Change in Supply Pipeline from Q3 to Q4
Daytona Florida Central Florida Panhandle
Fort Lauderdale Fort Myers/Naples Jacksonville
Melbourne/Titusville Miami Orlando
Sarasota/Bradenton Tampa/St. Pete WP Beach/Boca Raton
Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # PropsMiami/So Fla $653 21 $232 14 $445 28 $710 30Tampa 81 8 6 2 202 9 83 8Orlando 135 12 127 9 367 33 171 15Jacksonville 35 3 0 0 62 8 36 5Tallahassee 21 3 0 0 15 4 23 2Florida Panhandle 11 2 12 1 62 6 39 2Daytona Beach 4 1 45 4 16 4 30 7Fort Myers 0 0 15 2 17 2 58 4Sarasota 0 0 0 0 6 1 11 2Gainesville 6 1 0 0 7 1 21 2
Totals $946 51 $437 32 $1,198 96 $1,181 77
2010 20112008 2009
Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # PropsMiami/So Fla $945 41 $1,693 41 $2,821 55 $2,520 54Tampa 213 15 89 17 600 20 708 41Orlando 318 23 1,032 28 434 20 2,280 45Jacksonville 49 9 96 13 210 7 147 15Tallahassee 12 1 47 5 55 5 60 5Florida Panhandle 24 4 72 10 71 6 21 4Daytona Beach 25 4 51 3 32 5 160 9Fort Myers 26 7 21 3 47 7 111 12Sarasota 69 1 29 3 71 5 33 4Gainesville 15 1 0 0 24 3 84 7
Totals $1,696 106 $3,129 123 $4,364 133 $6,122 196
2012 2013 2014 2015
Vol ($M) # Props Vol ($M) # PropsMiami/So Fla $1,671 25 $585 20Tampa 500 24 542 26Orlando 489 27 518 26Jacksonville 74 10 270 19Tallahassee 16 4 65 9Florida Panhandle 20 4 59 8Daytona Beach 97 5 58 7Fort Myers 12 1 57 5Sarasota 146 11 54 6Gainesville 60 2 43 4
Totals $3,087 113 $2,251 130
2016 2017
2017 dollar volume of Florida hotel transactions continued to moderate from its peak in Q1 2015. The average price per room also moderated, dovetailing with the U.S. trend. That said, one of the year’s most notable transactions was Sunstone’s acquisition of the 175-room Oceans Edge Hotel & Marina in Key West for an impressive $1,000,000 per room. The largest transaction was Xenia’s acquisition of the 815-room Hyatt Regency Grand Cypress in Orlando for $205,500,000.
From mid 2013 to mid 2016 Florida hotel cap rates inched up slightly faster than the U.S. average. From late 2016 through 2017 Florida cap rates remained relatively stable while the U.S. continued its rise. 2017 closed with Florida cap rates being only 20 bps higher than the U.S. average.
Florida Transaction Trends
Source: Real Capital Analytics, STR and Colliers International
Change in Sales (Year Over Year)
Average Price Per Room Average Cap Rate (yield)
Yearend Sales By Total
Spotlight On
What do you get when you cross a former fund manager, Jeff Vinik, who is now a businessman, philanthropist, owner of the 717-room Tampa Marriott Waterside and the Tampa Bay Lighting hockey team with Bill Gates’ Cascade Investment? You get a 53-acre, eco-friendly, 9 million square foot, $3 billion redevelopment in downtown Tampa by Strategic Property Partners.
Known as Water Street and located between the Tampa Convention Center and the Channel District the development will include a 519-room JW Marriott, a 157-key five-star hotel with luxury condominiums, a new home for the Museum of Science & Industry, the 13-story University of South Florida Morsani College of Medicine and Heart Institute, thousands of new residential units and 3 million square feet of office, retail and entertainment space. Together, the new JW Marriott and the existing Marriott Waterside will have over 1,200 rooms and 175,000 square feet of meeting and event space.
The first phase of 4 million square feet is underway and will also include the Morsani College of Medicine. This phase will be completed by 2020, prior to the 2021 Super Bowl that will be held in Tampa. Full buildout is expected by 2027.
Water Street and improvements in the adjoining Channel District have prompted another local developer, Liberty Group, to build Tampa’s first dual branded hotel; a 213-room Hampton Inn and Home2 Suites in the Channel District. In 2014 Liberty Group successfully redeveloped an office building into the Aloft Tampa Downtown, which it sold in 2015. The Sheraton Tampa Riverwalk also sold in 2015 followed by the 521-room Hilton Tampa Downtown and 300-room Westin Harbour Island in 2016.
Rendering Water Street Rendering Dual Branded Hampton & Home2 Suites
Source: Real Capital Analytics, STR and Colliers International
Tampa Downtown
Rendering JW Marriott Atrium
$0
$2
$4
$6
$8
$10
Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17
Billi
ons
Rolling 12-mo. Total Quarterly Vol
-100%
100%
300%
500%
700%
Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17
Sales Change
$0
$50
$100
$150
$200
$250
Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17
Thou
sand
s
Florida Hotels US Hotels
3.0%
5.0%
7.0%
9.0%
11.0%
Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17
Florida Hotels US Hotels
Rendering JW Marriott
Q4
Accelerating success.
Florida Hotels Q4 2017Market Report
Accelerating success.www.colliers.com www.colliers.com
Colliers Hotels team exceeds our clients’ expectations by arranging highly successful transactions across all chain scales and independent hotels. Our Florida lodging practice excels because of our deep experience, local knowledge and investor relationships. Colliers International is a worldwide leader in lodging transactions, financing, valuation and consulting.
Col l iers International Group Inc. (NASDAQ: CIGI; TSX: CIGI) is an industry leading global real estate services company with more than 15,000 skil led professionals operating in 68 countries. With an enterprising culture and significant employee ownership, Col l iers p r o f e s s i o n a l s provide a ful l range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal , valuation and tax consulting; customized research; and thought leadership consulting.
Col l iers professionals think differently, share g r e a t i d e a s a n d offer thoughtful and innovative advice that help clients accelerate their success.
Kent SchwarzExecutive Vice President Colliers Hotels | Florida 1 727 298 5308 [email protected]
View Bio
Rich LillisExecutive Vice President | South Florida National Director, Hotels | USA 1 561 353 3640 [email protected]
View Bio