DALLAS, April 5, 2019 – Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, has announced that in the first quarter of 2019, the Miller-Gomes hotel team of Marcus & Millichap completed 11 hotel sales on behalf of clients. In 2018, the team sold 54 hotels in 13 states, including 29 in Texas.
“We provided pricing and market analysis on more than 300 hotels across the country last year, and between 2016 and 2018 we sold 68 hotels in Texas alone priced above $2.5 million, which is twice the amount of our nearest competitor,” said Allan Miller, senior director of Marcus & Millichap’s National Hospitality Group (NHG). “This year, we have over $420 million in inventory on hand and are again fully engaged in serving hospitality investors in Texas, the Southwest, the Midwest and throughout the country.”
Led by Miller and Chris Gomes, executive director of the NHG, the Miller-Gomes team is a network of 15 hospitality property investment specialists and a support team of four, with locations in Dallas, Austin, Houston, San Antonio, Chicago, Baton Rouge and Denver. Gomes has over 20 years of hospitality brokerage, advisory, and operations experience and Miller has more than 23 years of marketing, sales and hospitality brokerage experience. Since joining Marcus & Millichap, Gomes and Miller have been instrumental in closing more than $1.3 billion worth of hospitality transactions throughout the Unites States. In the last three years, the team has sold over 150 hospitality assets.
“Steady economic growth, coupled with improving hotel property performance metrics supported strong demand for hospitality properties nationwide last year and we anticipate another solid—or even better—year in 2019,” commented Gomes. “Healthy economic growth will support room demand this year and keep occupancy rate at elevated levels. Occupancy is forecast to climb 30 basis points this year to 66.5 percent, a more than 30-year record high. Elevated occupancy will also support healthy increases in the average daily rate and RevPAR, albeit at a moderated pace of growth compared to the prior five-year average.”
“Going-in cap rates continue to drive interest for hotel properties from investors seeking less volatility and greater yields than other investment options,” added Miller. “Assets change hands with cap rates that average in the mid-8 percent band but can vary as much as 200 basis points, depending on location and chain scale.”
This year, Miller and Gomes are increasing their presence in Houston and adding to their service capabilities on behalf of clients in the Midwest, in response to the significant amount of equity Midwestern-based investors have placed in Texas.
“Buyer demand will likely pick up in many of the Texas’ smaller markets where first-year returns up to 200 basis points higher than within Dallas and Houston can be found,” said Miller. “These areas include Waco, El Paso, San Antonio and Lubbock, where buyers are primarily targeting limited and select service hotels comprising 150 rooms or less. While sales are increasing in these smaller metros, nearly a third of hotel transactions will continue to take place in the Dallas/Fort Worth market.”
# # #
With more than 2,000 investment sales and financing professionals located throughout the United States and Canada, Marcus & Millichap is a leading specialist in commercial real estate investment sales, financing, research and advisory services. Founded in 1971, the firm closed 9,726 transactions in 2019 with a value of $49.7 billion. Marcus & Millichap has perfected a powerful system for marketing properties that combines investment specialization, local market expertise, the industry’s most comprehensive research, state-of-the-art technology, and relationships with the largest pool of qualified investors. To learn more, please visit: www.MarcusMillichap.com.