Some Investors See Now as the Time to Buy Hotels. Here’s What to Keep in Mind.
Some segments of the market, such as smaller, drive-to leisure hotels, have seen an uptick in demand. Others continue to struggle.
August 10, 2020 | Sebastian Obando | National Real Estate Investor
The hospitality industry has been one of the hardest hit commercial property sectors during the pandemic, so what can prospective hotel investors expect in the coming months?
Hotel operators are bracing for a recovery that’s likely to be longer and more difficult than the one that took place after the Great Recession. Most of the hotels that remained open in 2020 despite the COVID-19 crisis are generating very little revenue at the moment. Many face difficulty meeting the costs of mortgage payments, property taxes and insurance, according to real estate services firm CBRE.
NREI spoke to Nick Plasencia, managing director at The Plasencia Group, a commercial real estate advisory firm that focuses on hotels and resorts, about what investors can expect when examining lodging investment opportunities in the current market, how to bid competitively and what owning a hotel asset in this environment ultimately entails.
