Q3 Florida Hotels Q3 2017 Market Report www.colliers.com Accelerating success.
Florida Transaction Trends Hotel transaction volume in Florida has declined substantially since its post-recession peak in Q1-Q2 2015. Prior to the peak Florida hotel cap rates were as much as 90 bps below comparable transactions throughout the US. In Q3 2015 Florida cap rates rose above the US average and have consistently been 40 to 70 bps higher for the last eight quarters. Sales By Total Change in Sales (Year Over Year) Rolling 12-mo. Total Quarterly Vol Sales Change $10 700% $8 500% Billions $6 $4 $2 300% 100% $0 Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17-100% Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17 Average Price Average Cap Rate (yield) Florida Hotels US Hotels Florida Hotels US Hotels $250 11.0% $200 $150 9.0% $100 7.0% $50 5.0% $0 Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17 3.0% Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17
Most Active Markets 2007 2008 2009 2010 Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Miami/So Fla $2,155 77 $653 21 $232 14 $445 28 Tampa 795 51 81 8 6 2 202 9 Orlando 1,855 62 135 12 127 9 367 33 Sarasota 242 13 0 0 0 0 6 1 Brevard Co 18 3 4 1 11 1 8 2 Daytona Beach 246 10 4 1 45 4 16 4 Jacksonville 420 27 35 3 0 0 62 8 Gainesville 101 7 6 1 0 0 7 1 Naples 40 3 3 1 0 0 0 0 Florida Panhandle 82 7 11 2 12 1 62 6 Totals $5,955 260 $933 50 $434 31 $1,175 92 2011 2012 2013 2014 Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Miami/So Fla $709 30 $945 41 $1,693 41 $2,821 55 Tampa 83 8 213 15 89 17 600 20 Orlando 171 15 318 23 1,039 29 434 20 Sarasota 11 2 69 1 29 3 71 5 Brevard Co 69 3 19 2 71 3 61 5 Daytona Beach 25 6 25 4 51 3 32 5 Jacksonville 36 5 49 9 96 13 210 7 Gainesville 21 2 15 1 0 0 24 3 Naples 17 2 8 1 257 3 19 2 Florida Panhandle 39 2 24 4 72 10 71 6 Totals $1,182 75 $1,683 101 $3,396 122 $4,343 128 2015 2016 2016 (YTD) 2017 (YTD) Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Miami/So Fla $2,520 54 $1,671 25 $1,301 19 $458 17 Tampa 708 41 500 24 454 19 459 21 Orlando 2,277 45 489 27 380 19 446 18 Sarasota 33 4 146 11 78 9 27 4 Brevard Co 23 3 119 7 96 6 4 1 Daytona Beach 160 9 97 5 42 3 41 5 Jacksonville 144 15 74 10 49 6 222 15 Gainesville 84 7 60 2 60 2 32 3 Naples 218 5 23 2 23 2 0 0 Florida Panhandle 21 4 20 4 12 2 48 6 Totals $6,187 187 $3,199 117 $2,494 87 $1,737 90
Performance by City The highest RevPAR producing key markets continue to be the three South Florida markets of Miami-Dade, West Palm/Boca Raton and Fort Lauderdale. Miami-Dade continued its two-year decline in both occupancy and average rate resulting in a RevPAR drop of 3.9% during the first nine months of this year. For the first time since the recession, Fort Lauderdale also experienced a RevPAR decline through September; a very modest -0.3% attributed to minor drops in both occupancy and average rate. Conversely, Orlando continued its impressive growth posting a three-quarter RevPAR growth of 8.7% attributed to relatively equal gains in both occupancy and ADR. Daytona posted a 7.7% RevPAR growth during the same period, driven almost entirely by improvement in ADR. Occupancy 90% 80% 70% 60% 50% 40% Average Daily Rate $200 $150 $100 $50 RevPAR $160 $0 $120 $80 $40 $0 2013 2014 2015 2016 201609 YTD 201709 YTD
Capital Flows Cross Border Capital After significant Florida dispositions in 2013, Cross Border capital became a notable net buyer in 2014 largely due to capital flight from Latin America. To some degree this trend continued through 2016; however, for the first nine months of 2017 Cross Border capital has basically been absent from the Florida marketplace. Millions $ 2,500 1,500 500-500 -1,500-2,500-3,500-4,500 Acq Disp Net 2013 2014 2015 2016 2017 (YTD) Institutional Even with $2.3 billion in acquisitions in 2015, Institutional capital has been significant net sellers in Florida from early 2014 and that trend has continued into 2017. A notable portion of these dispositions related to distressed assets. Millions $ 2,500 1,500 500-500 -1,500-2,500-3,500-4,500 Acq Disp Net 2013 2014 2015 2016 2017 (YTD) REIT/Listed Reflecting REIT stock prices, REIT/Listed capital was mostly absent from acquisitions in 2016 resulting in the category being net sellers. Conversely, REIT/Listed capital has been modestly more aggressive with acquisitions during the first three quarters of 2017. Millions $ 2,500 1,500 500-500 -1,500-2,500-3,500-4,500 Acq Disp Net 2013 2014 2015 2016 2017 (YTD) Private Since 2013 Private equity has typically been a net acquirer in Florida with limited fluctuation in either acquisitions or dispostions. During the first nine months of 2017 the rate of dispositions remained relatively stable; however, the rate of acquisitions moderated resulting in Private equity being net sellers. Millions $ 2,500 1,500 500-500 -1,500-2,500-3,500-4,500 Acq Disp Net 2013 2014 2015 2016 2017 (YTD)
Florida s Supply Pipeline Florida s key markets have a total of 416 new hotels in various stages of development including planning, final planning and in construction. The largest allocation of these new projects is in the Greater Miami market, which has already experienced a decline in both occupancy and ADR. Sarsota/Bradenton s pipeline represents an increase of 12.2% of existing supply; the highest in Florida. Conversely, West Palm Beach/Boca Raton has the smallest percentage increase in the pipeline at only 0.9% of existing supply, with the Mandarin Oriental Boca Raton being the most significant project currently in the construction phase. Daytona Florida Central Florida Panhandle Fort Lauderdale Fort Myers/Naples Jacksonville Melbourne/Titusville Miami Orlando Sarasota/Bradenton Tampa/St. Pete WP Beach/Boca Raton
Spotlight On Sarasota Thanks to the foundation laid by John and Mable Ringling of famed The Greatest Show on Earth Sarasota is known as the Cultural Capital of Florida. Their love of the arts and other area quiet money have brought acclaim to venues like Frank Lloyd Wright s Van Wezel Performing Arts Hall. In 2017 Van Wezel was again ranked as the No. 1 Performing Arts Hall in North America in the 2000-seat category. During the last cycle, significant new supply entered the Sarasota-Bradenton International Airport market three miles to the north of downtown Sarasota. Until recently there had not been any new hotel supply downtown since the early 2000 s when the Ritz-Carlton and Hotel Indigo opened. That is changing rapidly as illustrated in the table below, which incudes other area projects also currently under construction. There are at least 10 additional hotels in various stages of planning; including those currently under construction they represent a 12.2% increase in supply. Sarasota Pipeline in Construction Hotel Name Location Rooms Open Aloft Sarasota Downtown Sarasota 138 2016 The Westin Sarasota Downtown Sarasota 255 2017 Art Ovation Hotel - Autograph Collection Downtown Sarasota 164 2017 Embassy Suites Sarasota Downtown Sarasota 180 2018 The Sarasota Modern, A Tribute Portfolio Hotel Downtown Sarasota 76 2018 Hyatt Place Sarasota Lakewood Ranch Lakewood Ranch 122 2017 Homewood Suites Sarasota Lakewood Ranch University Town Center 133 2017 Waterline Marina Resort - Autograph Collection Anna Maria Island 70 2017 Home2 Suites Nokomis 100 2017 Carlisle Inn Sarasota Sarasota 100 2018 Mainstay Suites & Sleep Inn (dual branded) Sarasota 200 2018 SpringHill Suites Bradenton Sarasota Riverfront Downtown Bradenton 120 2018 The Sarasota Modern, A Tribute Portfolio Hotel Embassy Suites Sarasota Aloft Sarasota The Westin Sarasota Art Ovation Hotel - Autograph Collection
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 1 727 298 5308 kent.schwarz@colliers.com View Bio Rich Lillis Executive Vice President South Florida National Director, Hotels USA 1 561 353 3640 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. www.colliers.com