Summer 2024 - Here in the far west----we’re improving but we're not fully back yet!!
Back in 1978 there was the iconic horror movie------ Invasion of the Body Snatchers.
Now moving through 2024 we have a sequel!!
Here's what we are experiencing. Hotel Purchasers from Ontario and BC (Vancouver) AND recovering Hotel Owners here in Alberta are active in the market. From no offers over the past few years to multiple concurrent or contiguous offers in 2023 and now 2024 it's the collision of the
Intractable Eager Purchaser against Immovable Hotel Owner!
PURCHASERS: We want the occupancy and revenue numbers or at least numbers close to that which we experience in our other provinces - (read British Columbia and Ontario). BUT we want to buy at those nice low prices that we have seen in your provinces (read Alberta and Saskatchewan) for the last 5-9 years!!
OWNERS: Our numbers are up and we are finally recovering value so we want sale prices back to or much
closer to normal!!
Here's some actual recent examples: And to use that old TV show true crime disclaimer: The information presented herein is based on facts but the names and values are disguised to protect the innocent (or rather the confidentiality of the owner, purchaser and transaction.)
Southern Alberta---Asking Price $10.5 mm - Suggested Offer - $7.5 mm - Actual Sale $10.25 mm
Northern Alberta---Asking Price $6.10 mm - Actual Offer - $6.10 mm -Done Deal? NO - Actual Sale $9.41 mm
Saskatchewan -------Asking Price $7.99 mm - Actual Offer #1- $4.89 mm - Actual Offer #2 - $5.9 mm
Central Alberta -----Asking Price $2.63 mm - Serious Interest at Asking Price then - Owner raised to $3.4 mm. And Owner has raised again to $3.7 mm
These are all indicators of the desire for the lower prices by purchasers but rising and successful expectations of hotel owners.
NEW: Check out our Hotel Exchange Group Website – www.hotelexchange.ca
We track the market and here's some history.
Back in 2019 I convened a group of seven agents, all from separate brokerages who like to sell hotels, some of us exclusively and some as part of a larger commercial real estate practice.
Internally we track 75-95 hotels. We meet monthly to add, subtract and update hotels that we are following. It provides us with sales, a view on the market, predominantly in Alberta, along with other potential sales and listings. We can also track sales value, and while maintaining confidentiality, provide a window on Cap Rates, PPK (Price Per Key ie Room) and possibly other factors. And we also can provide a number of hotel contractors; anything from Appraisers to Immigration Consulting to Hotel Management.
What you will see on our website are some of the hotels, categorized as "listed", ie with a listing contract for its sale. However the vast majority of hotel owners, wish to keep their affairs totally confidential and their hotels are indicated as "off market". Frequently the "off market" owners are not forthcoming with information. One of the owners that we have worked with simply says: "Here's what I want. Bring me an offer or an acceptable letter of Interest/Intent and then I'll provide the financials." Under these circumstances, why would any hotel purchaser even look at the hotel? Well.....based on the sophistication of the purchaser and the actual "product", ie the hotel itself, along with some broad initial information, transactions can be formed.
Prices are divided into 5 categories ranging from a few $100,000 to $10,000,000 to $30,000,000!
Listed (Public): These have more information presented and usually a downloadable brochure.
Off- Market (Blind): These have very minimal information - the location and most of the facts are only available when you contact us.In both cases you will need to sign the appropriate NDA and in some instances, we may ask for proof of financial capability to make a purchase, especially when you know about the issues of financing here.
Hotels are categorized by price categories and separately by four different location categories. And our team members and contact information are profiled on the site.