Hotel Real Estate Boom to Continue in 2007 and 2008

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. October 14, 2008

JANUARY 31, 2007. Jones Lang LaSalle Hotels anticipates that the robust environment of hotel real estate mega-deals is poised to continue throughout 2007 and into 2008. The lodging transaction market continues to boom in the U.S., with 2006 marking the third consecutive year of record sales.

'The rising number of private equity players continues to influence hotel real estate. Many investors who bought U.S. hotel assets in during 2005 saw their equity double in the following 12 months - attracting more investors to hotel real estate. We expect 2007 will continue to propel additional investors to the market, including some non-traditional off-shore and high-net-worth investors, as well as institutional, pension fund, private equity and REIT off-shore buyers to the market. Further, we expect the public-to-private trend to continue, which will increase the availability of for-sale assets,' said Arthur Adler, managing director and CEO-Americas for Jones Lang LaSalle Hotels.

'The continued shorter hold periods of 18 to 24 months, compared with the traditional three to seven year hold periods, will also influence the amount of assets in the market over the next few years, as will the accessibility to debt and healthy industry fundamentals,' said Kristina Paider, senior vice president of research and marketing for Jones Lang LaSalle Hotels.

The firm's latest Hotel Investment Outlook also reports that for the first time in two decades, trends in hotel real estate investment throughout the major regions of the world have aligned, with strong growth in investment activity in every market. Around the world, hotel real estate investment took another massive leap, to register a total of $72.5 billion in 2006, 62.9% higher than 2005's volume, which was itself a record year - posting at 60.9% higher than 2004.

Each region in turn, has posted historical highs, as a result of the weight of capital chasing opportunities, corporate profits growing, real estate in general becoming ever more of a favored asset class and hotel owners prepared to reinvest returns. The momentum will continue into 2007, however overall global volumes are expected to be marginally lower than 2006, primarily due to a slow down of portfolio transactions in Europe, which has seen exceptionally high portfolio sales during the past two years.