Florida Hotels. Q Market Report. Accelerating success.

Transcription

1 Q4 Q Market Report Accelerating success.

2 Florida Transaction Trends Spotlight On Tampa Downtown 2017 dollar volume of Florida hotel transactions continued to moderate from its peak in Q 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. 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. 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 closed with Florida cap rates being only 20 bps higher than the U.S. average. 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. Change in Sales (Year Over Year) Yearend Sales By Total Sales Change Rolling 12-mo. Total Quarterly Vol 700% 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 $10 500% Billions $8 $6 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 The Sheraton Tampa Riverwalk also sold in 2015 followed by the 521-room Hilton Tampa Downtown and 300-room Westin Harbour Island in % $4 100% $2-100% Average Price Per Room Rendering JW Marriott Average Cap Rate (yield) US Hotels $250 US Hotels 11.0% Rendering JW Marriott Atrium Thousands $ % $ % $ % $50 3.0% Rendering Water Street Rendering Dual Branded Hampton & Home2 Suites

3 Most Active Markets Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Miami/So Fla $ $ $ $ Tampa Orlando Jacksonville Tallahassee Florida Panhandle Daytona Beach Fort Myers Sarasota Gainesville Totals $ $ $1, $1, Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Miami/So Fla $ $1, $2, $2, Tampa Orlando , , Jacksonville Tallahassee Florida Panhandle Daytona Beach Fort Myers Sarasota Gainesville Totals $1, $3, $4, $6, Vol ($M) # Props Vol ($M) # Props Miami/So Fla $1, $ Tampa Orlando Jacksonville Tallahassee Florida Panhandle Daytona Beach Fort Myers Sarasota Gainesville Totals $3, $2,

4 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 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%. Occupancy 90% 80% 70% 60% 50% 40% Average Daily Rate $200 $150 $100 $50 RevPAR $160 $120 $80 $

5 Capital Flows Acq Disp Net Cross Border Capital Cross Border Capital kept to the sidelines in 2017 transacting at only 20% of its 2014 peak and 26% of 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 Millions $ 2,500 1, ,500-2,500-3,500-4, Acq Disp Net Institutional Institutional capital was once again a net seller as it has been for the past four years, though to a lesser degree in It too was mostly on the sidelines for the year and well off its 2015 peak activity. Millions $ 2,500 1, ,500-2,500-3,500-4, Acq Disp Net REIT/Listed After bench warming in 2016 REIT/Listed became the largest net acquirer in Much of this can be attributed to buoyancy in share pricing in late 2016 and stability in Millions $ 2,500 1, ,500-2,500-3,500-4, Private Of 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. Millions $ 2,500 1, ,500-2,500-3,500-4,500 Acq Disp Net

6 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% Allocation of Florida s Supply Pipeline Daytona Florida Central Florida Panhandle Fort Lauderdale Fort Myers/Naples Jacksonville Melbourne/Titusville Miami Orlando Sarasota/Bradenton Tampa/St. Pete WP Beach/Boca Raton Percent Change in Supply Pipeline from Q3 to Q4 Jacksonville Melbourne/Titusville Florida Panhandle Fort Myers/Naples Florida Central Orlando Sarasota/Bradenton WP Beach/Boca Raton Fort Lauderdale Miami Daytona Tampa/St. Pete -10% 0% 10% 20% 30% 40%

7 Florida Transaction Trends Spotlight On Tampa Downtown 2017 dollar volume of Florida hotel transactions continued to moderate from its peak in Q 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. 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. 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 closed with Florida cap rates being only 20 bps higher than the U.S. average. 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. Change in Sales (Year Over Year) Yearend Sales By Total Sales Change Rolling 12-mo. Total Quarterly Vol 700% 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 $10 500% Billions $8 $6 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 The Sheraton Tampa Riverwalk also sold in 2015 followed by the 521-room Hilton Tampa Downtown and 300-room Westin Harbour Island in % $4 100% $2-100% Average Price Per Room Rendering JW Marriott Average Cap Rate (yield) US Hotels $250 US Hotels 11.0% Rendering JW Marriott Atrium Thousands $ % $ % $ % $50 3.0% Rendering Water Street Rendering Dual Branded Hampton & Home2 Suites

8 Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIGI) is an industry leading global real estate services company with more than 15,000 skilled professionals operating in 68 countries. With an enterprising culture and significant employee ownership, Colliers professionals provide a full 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. Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that help clients accelerate their success. Kent Schwarz Executive Vice President Colliers Hotels Florida kent.schwarz@colliers.com View Bio Rich Lillis Executive Vice President South Florida National Director, Hotels USA rich.lillis@colliers.com View Bio 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. Accelerating success.