The hotel market has returned to almost normal since the recession, according to a recent Jones Lang LaSalle report, with growth in revenue per available room, the national occupancy up to almost the 2006 peak, $14.6 billion in transactions this year and lenders hungry to invest in hospitality.

The Cross Sector Outlook report indicates the volume of transactions this year is a 15 percent increase from last year, and another 15 percent increase is expected for 2014. Bill Grice, executive vice president with JLL’s hotel investment banking team, says lenders are competing for strong hotel deals. “For the most part, hospitality has recovered to almost pre-recession peaks, and lenders are actively pursuing quality hotel opportunities,” he says.

Grice and his team recently secured $125 million in refinancing for the Atlanta–based Generation Cos. LLC for a portfolio of 22 extended-stay hotels. The 2,528 rooms are spread out among nine Candlewood Suites, seven Suburban Extended Stay Hotels, three Staybridge Suites, two Mainstay Suites and one Homewood Suites. The properties, which are on average occupied in the upper 70 percent range, are located across Virginia, North Carolina, Texas, Florida and Tennessee.

H. Mark Daley III, founder and CEO of Generation, said in a statement that refinancing the portfolio “allows us to capitalize on the inherent upside potential within these diverse hotel markets. The properties continue to show strong top and bottom line growth as the economy and hospitality industry continues to improve.” His firm, which originally built the hotels, will also continue to manage the properties.

A number of lenders competed for this deal, and the closing process was quick, Grice says. A national bank, which Grice declined to name, provided the non-recourse, floating-rate financing.

According to Grice, there are several reasons that hotels are joining industrial, medical office and seniors housing as hot property markets. “Lenders have held back from financing new development, so there’s limited supply,” Grice says. “Plus the economy has recovered, and traveling has been as busy as it has ever been. The extended-stay market is a good indicator of the economy, as it caters to contractors able to find long-term work again.”

Many hospitality firms are echoing JLL’s rosy prediction for 2104. Raymond L. Gellein, chairman and CEO of Chicago-based Strategic Hotels & Resorts Inc., recently noted during a third-quarter conference call that his firm is encouraged by the growth trends in group business and transient demand. Strategic reported a revenue increase of 16.2 percent in the third quarter. Although Bethesda, Md.–based Host Hotels admits it was hurt by the government shutdown, the company still predicts that its comparable hotel RevPAR will increase 5.5 percent to 5.7 percent this year. Rockville, Md.-based Choice Hotels International Inc. said it opened 107 hotels in the third quarter, adding more than 9,700 guestrooms to its collection of half a million keys. 

Luxury and resort properties are getting the most attention. Last week, for example, Inland American Lodging Group announced it has purchased three Hotel Monaco hotels in Chicago, Denver and Salt Lake City, totaling 605 rooms, for $189 million. The Monaco properties are converted from historic buildings.

Marcel Verbaas, president and CEO of the Inland firm, said in a statement that his company has now purchased 13 hotels this year. "This acquisition of three market-leading hotels in excellent condition enhanced our portfolio’s geographic diversification and complements our recent acquisitions in the boutique, luxury hotel space,” he said.