The borrowing cost of debt financing continues to remain stable while equity financing has become relatively cheaper. We expect prices for hotel properties to fall slightly in the next quarter. This is not necessarily bad news since it will give operating performance as measured by EVA a chance to continue to increase vis-à-vis an increase in the cap rate, assuming that total borrowing cost remains stable or it becomes cheaper to borrow debt or equity money. This is report number 12 of the index series.
Liu, C. H., Nowak, A. D., & White, R. M. (2014). Third quarter 2014: Hotel prices decline on a year over year basis: Expect this trend to continue [Electronic article]. Center for Real Estate and Finance Reports Hotel Indices, 3(6), 1-18.