Motivation
Creating implied values using estimated net operating income (NOI) and cap rates since the Great Financial Crisis (GFC) has been relatively straightforward. Since the hotel market enjoyed nearly a decade of stable, steady growth, the trailing four-quarter estimated NOI could be used as a reliable stabilized aggregate NOI. Cap rate aggregates could include some distressed properties that traded at an abnormally high cap rate, since it was likely that fortunate assets would trade for a premium. The aggregation would smooth out these aberrations and produce a rate that one could reasonably expect a typical property to garner.
