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HVS Releases 2007 Cap Rate and Investment Trends Report

HVS recently announced the completion of the HVS 2007 U.S. Cap Rate and Investment Trends Report – an overview of U.S. Capitalization Rate and Investment Trends for the hotel sector.

HVS, a global hospitality and hotel services firm, recently announced the completion of the HVS 2007 U.S. Cap Rate and Investment Trends Report – an overview of U.S. Capitalization Rate and Investment Trends for the hotel sector. Capitalization is defined as the conversion of income into value and is executed by dividing income by the capitalization rate, or the cap rate.

This survey provides an overview of average cap rates and investment trends that occurred during the calendar year 2006, as well as a forecast of hotel investment parameters. Also included in the report is a representative sample of 2006 Major U.S. Sales Transactions broken out by region, with cap rate ranges.

Interesting points featured in the 2007 Cap Rate Report include:

  • While average cap rates have remained relatively stable over the past two years, they have dropped dramatically since 2002.
     
  • The Midwest region has the highest average cap rate in the U.S. at 9.4%.
     
  • Hotels with a sales price of $101 million and above have noted the lowest average cap rate at 5.2%.
     
  • The report provides a forecast of hotel investment parameters over the next three years.

Information within The 2007 Cap Rate and Investment Trend Report was generated from a database, which was developed by HVS to maintain hotel information, sales transactions, market studies, and company research pertaining to the hospitality industry. HVS is merely a conduit for the data within the survey. HVS does not assume responsibility or liability for the data accuracy, usability, confidentiality, or other matters related to this document.

HVS is a full-service hospitality consultancy providing industry skill and knowledge worldwide. HVS offers market and financial feasibility studies, valuations, strategic analyses, development planning, and litigation support. Additionally, HVS specialists provide unique knowledge in the areas of executive search, investment banking, brokerage, asset management, and corporate and single-property strategic planning, management contracts, environmental sustainability, timeshare consulting, food and beverage operations and restaurant appraisal, interior design, gaming, technology strategies, organizational assessments, operational management, strategy development, convention facilities consulting, marketing communications, property tax appeals, and investment consulting. Since 1980, HVS has provided hospitality services to more than 15,000 hotels throughout the world for virtually every major industry participant. Principals and associates of the firm have written textbooks and thousands of articles regarding all aspects of the hospitality industry, thus literally having written the book on how hotels should be valued.

To purchase a copy of this report, please visit our Bookstore page at http://www.hvs.com/Bookstore/ or e-mail Erica Feurt at efeurt@hvs.com or Amy Beam at abeam@hvs.com. The cost of The 2007 HVS Cap Rate and Investment Trends Report is $250 USD and it can be directly purchased off of the HVS Bookstore page.