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The recession has been particularly painful to The Plasencia Group, a Tampa-based firm with a niche brokering hotel acquisitions.
But that pain, says CEO Lou Plasencia, could be coming to an end. Average daily rates at properties nationwide are up, reports Plasencia, and occupancy rates are on the rise, too. That means hotels are in more demand as potential investments, says Plasencia, which in turn means business is up at The Plasencia Group. Prices for properties are also on the mend.
“We're almost back to 2007 peak levels,” on property prices Plasencia tells Coffee Talk. “We have a lot of owners who believe that the time is right to put properties back on the market.”
Indeed, Plasencia says the firm is currently advising clients on nearly $1 billion worth of hotel deals. It recently hired a senior executive for its offices in Houston and Dallas, and it also seeks to grow its presence in markets in the Midwest and Northeast.
It's quite a change from spring 2009, when nearly half the firm's clients struggled to pay debt service. Business and leisure travel were off significantly back then, especially in luxury properties. The slowdown forced Plasencia to shift the firm's focus, from consulting on selling properties to advising hotel owners on how to manage costs while preserving value.
The shift to better days, says Plasencia, is even marked with an added bonus: cash buyers. There has been an influx of buyers, some foreign, who have bought properties in all-cash deals, which helps eliminate holdups at closing. Says Plasencia: “It's been a while since we've seen this much pure cash going after hotels.”
Plasencia is optimistic the trend will have staying power. “We expect hotel demand to continue to climb for the foreseeable future,” says Plasencia. “It's just a great time to be in the business.”
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