Limited-service hotels have long been the darlings of the hotel industry, but do U.S. investors still have their eyes set on these properties?
It would seem so, according to Marcus & Millichap’s "National Hospitality Research: Fourth Quarter 2018" report. Limited-service hotels (along with upper-midscale properties) led transaction velocity during all four quarters of 2018, the research found. Economy hotels, in particular, offered lower entry costs and first-year yields averaging in the low 10-percent band. Meanwhile, upper-midscale hotels traded with cap rates close to the national average.