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From the Current Issue

And then there is the hotel sector: A hot property type that is poised to get even hotter as tourism surges

by Mike Consol

Ask any experienced real estate operator or investor about the four main property types and the following will roll effortlessly off their tongues: office, industrial, retail and residential. Noticeably missing is hotel real estate. Though it would be a stretch to insist the four major property types be expanded to five to accommodate hotels, it is worth noting that hotel fundamentals have never been better — despite a formidable onslaught from Airbnb, VBRO and other members of lodging’s shared economy. What’s more, there is every reason to believe hotel economics will get better yet, as tourism (especially from Asia) continues to explode, with the United States being one the chief destinations.

From the Current Issue

Profile: Richard Hough, CEO of Silvercrest Asset Management

by Mike Consol

When it comes to IPOs, the thrill is gone. What was once a process full of the romance and excitement of becoming a publicly traded company on Wall Street, but that has largely dissipated as the process has become too expensive and painful for many companies to bear. Underwriting eats up 4 percent to 7 percent of gross proceeds, according to research by PwC, plus an additional $4.2 million of offering costs such as the required financial assessment followed by the roadshow to visit and pitch institutional investors on the opportunity. Once public, CEOs estimate the annual cost of being public between $1 million and $2 million per year. Then, for many companies, there is the relentless short-term pressure exerted by shareholders to keep share prices aloft. Add the ill-fated IPOs of companies such as WeWork and it all helps explain why in 1996 there were more than 7,000 domestic companies listed on U.S. stock exchanges compared with fewer than 4,000 today.

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