Bettina Rodarte

***South Central Hotel Markets Update*** The chart below summarizes actual data through April 2024 and our current forecasts for the next three years. Some notables below: - Fort Worth continues to be the leader in the region with respect to RevPAR performance as a percentage of 2019 levels. Fort Worth's RevPAR is about 19% above 2019 levels. Fort Worth is forecasted to have the highest rate of hotel room supply growth in the region with 3.5% growth forecasted in 2025. The other markets are all forecasted to have supply growth in the 1-2% range in the coming years as interest rates and construction costs have made it challenging to get new developments to "pencil out". - Austin remains the nominal RevPAR leader with a April TTM RevPAR of $111.67. The closing of the Austin convention center as part of the expansion project will impact the market in the coming years, but Austin will offer one of the premier venues in the country once complete! RevPAR in March was down y-o-y for the market by 14.6%, but was up about 5.5% in April, likely fueled by the CMT Music Awards at the Moody Center ATX and MotoGP at Circuit of The Americas. - Dallas is second to Fort Worth with respect to RevPAR as a percentage of 2019 performance with the market about 13% above 2019 levels. RevPAR growth in Dallas was approximately 3.4% higher than the previous quarter and RevPAR was up 12.2% y-o-y for the month of April 2024. The April 2024 TTM RevPAR is in line with what we were forecasting for year-end 2024 and upward revisions to our forecasts for the market are likely. - Over the past few years, Houston lagged the other markets in the region with respect to RevPAR growth since Houston is largely a corporate-driven market. However, Houston has shown impressive RevPAR growth with y-o-y increases in RevPAR in 21 of the last 24 months. RevPAR was down slightly in March and April compared to the prior year, but RevPAR for the quarter is up 19.9% from the prior quarter. - San Antonio shows signs of moderation. RevPAR is down for the 2024 TTM compared to year-end 2023, but RevPAR is up 7.9% in April 2024 y-o-y. New supply growth for the market will be low in the coming years which should help existing properties focus on gaining market share. However, new supply in the San Antonio CBD submarket will bring new competition to the submarket as several high-end hotels are currently in the development and planning stages. - In New Orleans, RevPAR declined y-o-y from April through December 2023 as the post-COVID-19 leisure travel surge cooled, but the market has shown y-o-y growth in 3 of the first 4 quarters of 2024. RevPAR is up by 18.9% for the current quarter from the prior quarter. RevPAR is expected to increase by about 3% per year from 2025-2028 as the threats from new supply remain low in the market. Reach out to me if you have any questions about any hotel markets. Kevin Donahue Executive Vice President 512-499-4981 kevin.donahue@cbre.com CBRE Hotels and CBRE

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Q2 in DFW is witnessing substantial industrial absorption in buildings larger than 250,000 sf, accounting for 15% of the total vacancy, and the quarter is not even over yet. Notably, smaller sizes are experiencing negative absorption. Check out the chart below for more insights. #IndustrialRealEstate #Q2Trends #MarketAnalysis

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"U.S. hotel performance stabilized following three volatile weeks affected by the total solar eclipse and Easter calendar shift. Normal patterns returned in the form of solid weekday and top 25 market performance, as well as strong group demand." #hotels #hotelindustry #hotelperformance #hospitality #hospitalityindustry #dshhoteladvisors https://lnkd.in/erGCiuDS

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Is Grand Riviera the value-add opportunity you've been waiting for? Location, as they say, is everything in real estate. Grand Riviera is perfectly positioned in Irving, TX, a thriving area between DFW International Airport and the Las Colinas Urban Center. Imagine the convenience of being close to major highways and bustling employment centers, where economic growth is not just a possibility but a certainty. The planned $3 billion Terminal F by DFW and American Airlines is set to further fuel this growth. It’s an investment in the future, and for Grand Riviera, it means increased demand for rental housing. This is a place where people want to live, and that’s a powerful factor driving our enthusiasm. At first glance, you might be surprised that we chose a 1972 vintage asset. Typically, properties from the 1970s don't align with our investment strategy. However, Grand Riviera presents a compelling exception for several reasons! To access due diligence and subscribe to this investment, please access our investor portal linked below in the comments.

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"High interest rates and a persistent bid-ask gap have kept hotel investors from closing as many deals in the first half of 2024 as they would have liked, but experts say conditions are improving to the point where the transactions market is likely to pick up in the second half of the year." #hotels #hotelsandresorts #hotelindustry #hospitality #hoteliers #dshhoteladvisors https://lnkd.in/eE-myAYH

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"The valuation of publicly traded hotel brand companies and hotel real estate investment trusts is a tale of two cities." #hospitalityindustry #hotels #realestate #hotelindustry #realestateinvestment #dshhoteladvisors https://lnkd.in/eru2Cn4k

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It was an honor to be on Episode 50 of Transaction Talk with Dennis Nessler of LODGING Magazine and Kevin M. Davis. We had a great conversation about what is currently happening in the lodging industry, what we can expect going forward, and how we should all be adjusting our strategy. In this clip, Dennis asks what we think is attributing to the slowdown of hospitality transactions. Several key factors contribute to this trend: - Rising Interest Rates: The dramatic increase in interest rates has been a major factor. While rates were abnormally low for about 14 years post-GFC, a 500+ basis point increase has occurred since March 2022, raising the cost of debt to 8-10% resulting in a recalibration of asset values. - Market Adjustments: The market is transitioning from a long period of low rates to a medium-term situation where rates are significantly higher slowing sale transactions as buyers and sellers reassess expectations. - Bid-Ask Spread: There is a significant disparity between the prices that sellers hope to achieve and the amounts buyers are willing to pay, creating a notable bid-ask spread and further slowing down transactions. What would you add? You can watch the rest of the conversation at the Lodging on Demand YouTube channel. The link will be in the first comment. #hospitalityindustry #hotelindustry

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I don't know why brokers do this?!?!?!?! I looked at this hotel in the Houston area... I went to the STR report and pulled the following numbers I could potentially achieve if I could get the hotel performing up to the average of the comp set. Average daily rate (ADR) - $50 Occupancy rate - 54% keys - 120 What could this hotel potentially gross annually? 50 * .54 * 120 8 365 = 1,182,600 We will use a NOI of 30% 1,182,600 * .3 = 354,780 Let's go with a 10% cap. I should be even more conservative on the cap, but you will see why it doesnt matter at this stage. 354,780 / .1 = 3,547,800 proforma value. The current asking price is 4,995,000. I don't know brokers overprice their listings. What this place could be worth is not even as high as their asking, let alone what the current value calculates to be with lower income. Obviously, I skipped on this one and moved on to the next deal to underwrite.

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Lot's of talk in the CRE industry these days about the high #rent increases for #apartments the last few years. No doubt the increases have been startling here in #DFW #Dallas and across the US. For our market, however, occupancy has been solid, which suggests that there is limited pushback on acceptance of these much higher rents, especially for Class A, urban core properties. Class B, on the other hand, has pushed rents even faster than Class A and has seen occupancy decline. Click on our review below to see a fuller discussion and the underlying numbers. Avison Young | US

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NEWMARK WEEKLY LODGING INDUSTRY RECAP May 5 thru 11 In recent years, rising interest rates and declining property values have significantly impacted the commercial real estate (CRE) debt markets. Throughout 2022 and 2023, these factors led to a noticeable decrease in loan originations as both demand and supply fell. However, there is optimism for a healthier market in 2024 as CRE values and interest rates are expected to stabilize. While the short-term outlook includes challenges related to refinancing, with existing loans having interest rates around 150 basis points below current market rates, the overall market seems poised for recovery. Banks, insurance companies, and Commercial Mortgage-Backed Securities (CMBS) issuers continue to dominate the CRE lending landscape, accounting for 90% of outstanding CRE loans. In 2023, all three types of lenders reduced their growth, with CMBS issuers experiencing the largest decline. There has been a noticeable shift in loan composition, with lenders increasingly favoring multifamily loans over office loans. This change, coupled with stricter underwriting standards such as lower loan-to-value (LTV) ratios for CMBS loans, indicates a more cautious approach to lending. Despite these tighter standards, delinquencies have risen across most loan types, especially office loans, which have exceeded a 6% delinquency rate. Nonetheless, CRE debt remains an attractive investment compared to direct real estate ownership when evaluated on a risk-adjusted basis. Lodging stock performance has been varied. Choice Hotels (CHH) saw a 5% decrease in its stock price despite positive analyst sentiment. Ashford Hospitality Trust (AHT) faced declines due to missed earnings estimates. On the other hand, Host Hotels & Resorts (HST) successfully issued unsecured notes at a favorable yield, using the proceeds to repay higher-interest debt. Sunstone Hotel Investors received a rating upgrade, and Ryman Hospitality (RHP) maintained a Buy rating despite a lowered price target. According to STR, there was a slight increase in US Hotel RevPAR, providing some optimism for the industry. Various hotel groups have announced new developments and renovations, although some are still dealing with financial challenges. Overall, the hotel sector presents a mixed picture with both opportunities and risks for investors. Download our Top 104 Hotel Market Nsights Reports: https://lnkd.in/gP3tpHVN Newmark Valuation & Advisory Newmark w #NewmarkHotels #HotelMarkets

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@Bryan Glasshagel gave a very detailed presentation about the Dallas market yesterday at our Spring Frame event at the Westin Stonebriar. Some of the key takeaways were: -Improving New Home Trends across Texas . Not just DFW and Houston. YOY Starts are up 13% and 15% respectfully in the 2 markets. -Texas is ranked 2nd Nationally in Net Migration with positive migration at 174,261. -The Dallas economy is growing with 19 new HQ relocations in 2023. -Big YOY start increase for many builders including Green Brick Partners, Bloomfield Homes, David Weekley Homes, Taylor Morrison and Tri Pointe Homes. - Housing start activity should see double digit increase in 2024

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Tenant Improvement Allowances? No Thanks. A growing pool of landlords across the country are eager to ditch tenant improvement allowances in favor of extended rent abatement periods in order to bypass headaches such as municipal permitting delays and higher construction expenses.

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DFW Transactions DFW Office 20K-500K SF Monthly Market Transaction Snapshot   April 2024 compared to May 2024 April 2024 Transactions: 4 May 2024 Transactions: 7 An increase in volume of 75%   May 2023 compared to May 2024 May 2023 Transactions: 6 May 2024 Transactions: 7 An increase in volume of 17%   2023 YTD compared to 2024 YTD 2023 YTD Transactions: 31 2024 YTD Transactions: 29 A decrease in volume of 6%   #DFWCRE #MarketTrends #Transactions #Office #MedicalOffice

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