Kurt Alexander

***South Central Hotel Markets Update*** The chart below summarizes actual data through April 2024 and our current forecasts for the next three years. Some notables below: - Fort Worth continues to be the leader in the region with respect to RevPAR performance as a percentage of 2019 levels. Fort Worth's RevPAR is about 19% above 2019 levels. Fort Worth is forecasted to have the highest rate of hotel room supply growth in the region with 3.5% growth forecasted in 2025. The other markets are all forecasted to have supply growth in the 1-2% range in the coming years as interest rates and construction costs have made it challenging to get new developments to "pencil out". - Austin remains the nominal RevPAR leader with a April TTM RevPAR of $111.67. The closing of the Austin convention center as part of the expansion project will impact the market in the coming years, but Austin will offer one of the premier venues in the country once complete! RevPAR in March was down y-o-y for the market by 14.6%, but was up about 5.5% in April, likely fueled by the CMT Music Awards at the Moody Center ATX and MotoGP at Circuit of The Americas. - Dallas is second to Fort Worth with respect to RevPAR as a percentage of 2019 performance with the market about 13% above 2019 levels. RevPAR growth in Dallas was approximately 3.4% higher than the previous quarter and RevPAR was up 12.2% y-o-y for the month of April 2024. The April 2024 TTM RevPAR is in line with what we were forecasting for year-end 2024 and upward revisions to our forecasts for the market are likely. - Over the past few years, Houston lagged the other markets in the region with respect to RevPAR growth since Houston is largely a corporate-driven market. However, Houston has shown impressive RevPAR growth with y-o-y increases in RevPAR in 21 of the last 24 months. RevPAR was down slightly in March and April compared to the prior year, but RevPAR for the quarter is up 19.9% from the prior quarter. - San Antonio shows signs of moderation. RevPAR is down for the 2024 TTM compared to year-end 2023, but RevPAR is up 7.9% in April 2024 y-o-y. New supply growth for the market will be low in the coming years which should help existing properties focus on gaining market share. However, new supply in the San Antonio CBD submarket will bring new competition to the submarket as several high-end hotels are currently in the development and planning stages. - In New Orleans, RevPAR declined y-o-y from April through December 2023 as the post-COVID-19 leisure travel surge cooled, but the market has shown y-o-y growth in 3 of the first 4 quarters of 2024. RevPAR is up by 18.9% for the current quarter from the prior quarter. RevPAR is expected to increase by about 3% per year from 2025-2028 as the threats from new supply remain low in the market. Reach out to me if you have any questions about any hotel markets. Kevin Donahue Executive Vice President 512-499-4981 [email protected] CBRE Hotels and CBRE

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Conrad Madsen, SIOR 🌵 and I covered a lot of ground on the most recent episode of the C-Suite podcast, including current market trends and all things Dallas (including the story behind the hat). Give it a listen and let me know your thoughts.

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Accounting rules may not be the most thrilling topic, but this piece from the FT is an interesting read. It's about the historical significance of accounting systems and their impact on the rise and fall of nations. It sheds light on the shift towards fair value accounting rules, particularly under IFRS, and its adverse effects on business investment, economic growth, and even green technologies. In simple terms the article argues that the switch to IFRS accounting rules may have induced short-termism, damped business investment by between a third and a quarter, and even contributed to higher carbon emissions.   Any thoughts from the accounting nerds in my network? Do you think the right accounting standards can have a significant impact on supporting long term investment and green growth objectives? Should the new UK Government, post-Brexit and with a large growth and investment deficit, take another look at this? Ben Monks Laura Higgins Malik Ajani Jr Sam Shires Ric Dudley Tom Nichols George Jones

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Texas is the go-to destination for savvy individuals and families looking to escape the high costs and regulatory burdens of states like California. Here’s why: 1. Economic Growth: Texas boasts one of the fastest-growing economies in the U.S., with a GDP growth rate of 3.7% in 2023, significantly outpacing the national average. 2. Tax Advantages: Unlike California, Texas has no state income tax. This means more of your hard-earned money stays in your pocket. In fact, the average Californian pays 13.3% in state income taxes, while Texans enjoy zero. 3. Affordable Housing: The median home price in Texas is $325,000, compared to California’s staggering $775,000. This affordability opens doors for more investment opportunities and higher returns on rental properties. 4. Business Climate: Texas is known for its business-friendly environment, ranking 1st in the nation for corporate headquarters relocations. Companies like Tesla, Oracle, and Hewlett Packard Enterprise have moved to Texas, creating jobs and boosting local economies. 5. Quality of Life: Lower cost of living, excellent schools, and a diverse cultural landscape make Texas an attractive place to live. Cities like Austin, Dallas, and Houston offer vibrant communities and numerous amenities. Would you ever consider moving to Texas? #AustinTX #AustinLife #HoustonTX #SpaceCity #DallasTX #Texas #TexasLife #states #LoneStarState #beststate #america #usa 

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Anyone curious about capital markets' receptivity for vacation rental providers--or for that matter most growth oriented lodging companies--would be well-served to read the Vacasa announcement this morning. Senior secured convertible notes priced at 11.25% with a liquidation preference at 1.3x. Need capital? Expect to pay up and be flexible in the position new capital takes in the capital stack. #destcap #lodging #vacationrentals #vacasa #growth #capitalmarkets

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For dealmakers it’s a year of the haves vs the have not during the NYU IHIIC. Brad Rahinsky, President & CEO, Hotel Equities, shares why some developers get deals done while others are struggling. #hotels #hotelfinance #hoteldeals #hotelpodcast

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Hotels looking for land...HMU we are ready for you... Marriott International brands dominated Texas's hotel landscape, opening more than 15,000 rooms. Hilton Worldwide and IHG Hotels & Resorts followed, with approximately 12,000 and 7,500 rooms, respectively. Independently owned hotels ranked fourth, contributing 4,400 rooms (about 8% of new additions). Despite economic challenges, independent hotels performed well by offering highly localized, authentic experiences. Austin leads with 2,300 independent rooms. Midtier brands, such as Marriott’s Fairfield Inn, Hilton’s Home2 Suites, and IHG’s Holiday Inn Express, saw significant growth, especially in Houston. Looking ahead, Marriott, Hilton, IHG, and independent hotels are set to continue dominating room development in Texas. #HotelDevelopment #TexasRealEstate #Marriott #Hilton #IHG #IndependentHotels #CommercialRealEstate #HotelSales #HotelLeasing #CRE #Austin #RoundRock #CedarPark #GeorgetownTX #Leander #Pflugerville #Bastrop #SanMarcos #KyleTX #Buda #FlexSpace #IndustrialRealEstate #RetailSpace #WarehouseLeasing #RoomConstruction #CREBroker #InvestmentProperty #MidtierHotels #HoustonHotels #AustinHotels #TexasHotels #CommercialBrokerage #LeasingOpportunities

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The hospitality industry is seeing the same trend that the airlines are seeing. Weakness in the lower end of the consumer and strength in the upper income markets. Delta blames 'Lower fare discounting' Bastian told investors. "What you see happening is the impact in the domestic marketplace to the lower fare discounting that's been going on this quarter." Particularly in the lowest seat price range, competition from low-cost carriers is resulting in discounted airline ticket prices, eating away at profits when rising fuel and other operational costs are hitting the bottom line. #hospitality #travel #hotels #airlines #hotelbroker

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And it has begun… Over the last few weeks I have seen at least a half dozen deals extolling the strength of the DFW market. Today, I received notice that 2 of my deals in the DFW area have suspended distributions. Acts of prudence, thoughtfulness, a softening of the market, and failure to meet pro forma expectations. Anyone else see a problem with this? Add this to another half dozen significant underperforming deals, not all in the DFW area, and I figure it will be interesting to see just how much capital is returned on these deals in the coming years. I have confidence in those I have invested money with, but there are certainly cracks in the foundation. If this is a sign of things to come, there are going to be a lot of GPs, KPs, and money raisers that are going to find it a lot more difficult to keep the money inflows, and we may see a large evaporation of wealth. My friend Flint Jamison posted earlier this week that there wasn’t blood in the streets, but we haven’t heard the fat lady sing yet have we? Everyone thought the Fed easing was going to be a Godsend. Give it a few quarters, but it’s not providing much of a rescue so far. If you are not investing in a diversified portfolio, things may be very bumpy in the coming months. Remember, unless you figure out a way to keep money, it really doesn’t matter how much you make, and CRE over the last 24 months has been less than stellar compared to other asset classes. In my early 20’s, making less than 1/10th as much as a lawyer friend who was making a multiple 6-figure income, I actually was able to keep more of my money. Lesson well learned. Anybody having better, or worse, experience than what I am experiencing recently?

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'Big D' Industrial Stays on Top: JLL Capital Markets' Pauli Kerr on why the Dallas-Fort Worth market is a bet worth making. https://lnkd.in/eeCZyEBP

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WE Food Enterprises Hospitality Group laid out some Texas-sized development plans as it prepares to expand a 60-year-old restaurant brand. The Houston-based restaurant group inked a deal with Huddle House to open 20 units in Texas. It’s the group’s first franchise venture and is the largest-ever agreement for Huddle House. The all-day breakfast casual dining chain has about 270 locations in 21 states. Owned by Ascent Hospitality, it’s ranked No. 234 on the Franchise Times Top 400 with $219 million in sales in 2023, a dip of 0.5 percent from 2022. #FMSFranchise #Franchising #FranchiseAdvisors #FranchiseConsultant #Franchiseyourbusiness #buyafranchise #franchisefunding https://lnkd.in/eMpZCinU

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DD|HA 2024 Q2 Hotel Industry Update – Hope for the Best, Prepare for the Worst As I have stated before, I expect the U.S. Hotel Industry is heading for unsettling economic conditions. On April 3rd, I posted DD|HA’s U.S. Hotel Industry Update for Q1. In that update and subsequent Linkedin posts, I expressed that the U.S. hotel market was heading for an extended economic downturn. I also shared that it was very unlikely that U.S. hotel occupancy will increase in 2024 as most forecasters predicted [at that time]. In June, the hotel industry forecasters issued revised forecasts reflecting a decrease in occupancy and moderated ADR growth for 2024. Unfortunately, macroeconomic conditions in Q2 have shown further deterioration. While April and May hotel demand was positive, preliminary weekly STR releases indicate that June and the first week of July were flat to down. Slowing demand will put downward pressure on ADR growth. Factors impacting hotel demand growth… U.S. unemployment [rate] has ticked up again this month to 4.1% and is expected to increase as layoffs continue. The Sahm Rule holds that when the unemployment rate rises at least 0.5% above the YoY [3-month average], a recession has begun. Following the July increase to 4.1%, the latest Sahm Rule indicator is at 0.43%. GDP growth moderated in Q1 to 1.4%, down from the 3.4% in Q4 2023. On July 10th, GDPNow adjusted the Q2 GDP forecast to 2.0% from a June 26 forecast of 3.0%. A wave of commercial debt is set to mature in H2 2024 and 2025, as interest rates remain high. It was also announced this week that consumer credit rose to $11.7 billion in May, above the $8.0 billion dollar estimate and the $6.5 billion in prior month. These factors, coupled with the employment situation, will certainly put pressure on single-family home loans and the overall banking industry. These economic patterns are eerily similar to the trends leading up to the GFC… an increasing unemployment rate preceded by a slowdown in hotel demand, slowing GDP, accelerated layoffs and a [looming] banking crisis. Hoteliers should brace for the impact to hotel demand beginning in H2 2024 and throughout 2025. Given these facts, I felt it was important to provide the hotel community with a forecast that is quite different from the others. The 2024 DD|HA forecast shows a much bleaker outlook with RevPAR growth expected to be at or near 0.0% for 2024. Our 2025 forecast represents a “what if” scenario. What would happen to occupancy, ADR, and RevPAR if we transposed the same monthly YoY “decreases” in demand and revenue that the industry experienced in 2009 during the GFC? Learn from history…prepare for the worst. #DDHA #sahmrule #Hotels #GDP #Unemploymentrate #Greatfinancialcrisis #GFC https://lnkd.in/eYztMnGc DD|HA U.S. Hotel Market Forecast for 2024 and 2025 (What if scenario)

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As we head into our busiest time of the year, I’m proud to share why Tangy Management is leading the way in short term rental hospitality management. One big reason?!? We know our competition better than anyone else. We don’t just create comp sets for entire markets… we build custom comp sets for each individual home. This means we can outprice competitors and maximize profits. While most of our competitors are down this year, we’re up 30%. How? By using a blend of cutting-edge AI and our hospitality-trained experts to fine-tune pricing multiple times a day. This allows us to adapt to trends in real time and make smarter, faster decisions for our clients. At Tangy Management, we don’t just manage properties—we optimize them to deliver results. And this year, the results speak for themselves. Here is team Tangy Santiago Nieto and Victor Feria cheering me on at the The 33rd Annual South Florida Tourism Professional of the Year Award

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How well are your properties performing? Saw a post from Andrew Cushman yesterday that talked about the shift away from quoting IRR’s in a presentation to using ARR’s only. Also got some Q2 distribution notices yesterday. Actual distributions continue to lag projected distributions. Whether the ARR will be below projections at the time of a refinance or sales event remains to be seen. However, the lower than projected distributions will have an impact on IRR. If a stock reported earnings and missed expectations to the same degree, the stock would be crashing. It’s a good thing for real estate sponsors and GP’s that the real estate market is 👉 illiquid 👉 lacks price transparency 👉 doesn’t mark to market the investment 👉 is highly unregulated Otherwise, when they opened their quarterly report, there might be people heading for the exits more often. Many are hoping the Fed speak about lower interest rates, maybe at the September meeting will bring back buyers. The equity markets seem to climb in the face of major warning signs on the horizon, as pointed out by Tom Basso yesterday. How well do you expect your CRE deals to perform in the coming year?

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As a math major and CEO, I'm always watching numbers and cash...so let's get boring and talk about tax policy! Both sides of the aisle have expressed support for not taxing tips to servers in the hospitality industry. That seems very nice and thoughtful. And believe me, I am a loyal customer who tips generously for great service. Let's consider some math as we feel good about giving tax-free gratuities: Let's say your Federal Tax Rate is 33%, and State Tax is 6.5%... let's round up your tax burden to 40% for easy math. We won't even include local taxes. You go to a restaurant and have a great meal. Your food and beverage bill is $167, and adding a 20% tip, you are roughly at a $200 total bill. To pay that bill, you have to earn $333. ($333 minus 40% in taxes equals $200.) So, you needed to earn $55 to give your $33 tip. I am not advocating for or against tax-free gratuities; I just want to ask the question as to what is so noble about earning a tip that it should NOT be taxed, while other forms of compensation are taxed at normal rates?

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