from the Hospitality World Network,  August 1, 2011:

By segment, transaction activity in California is across the spectrum, said Robert Rauch, president of San Diego-based hospitality consultancy R.A Rauch & Associates.

“[Real estate investment trusts] have been picking off high-profile assets such as Hyatt and Hilton along San Diego’s waterfront, but also, they have been targeting ‘non-trophy assets’ such as Hilton Garden Inn, Homewood Suites, Marriott Residence Inn and Courtyard by Marriott,” he said. “I see this pattern continuing this year as REITs have so much cash. Once these REITs have set the bar regarding capitalization rates, opportunity funds will be able to purchase these assets with a more predictable return on investment.”

“The markets seeing the most value are San Francisco—up in both [revenue per available room] and booking pace by 20 percent—and the west side of Los Angeles—up 12 percent in both. San Diego, while up only 8 percent in RevPAR and booking pace, did not drop as far as San Francisco during the recession. Secondary and tertiary markets dropped quite a bit during the Great Recession and have had little investor interest,” he added.