New York hotel investment reached a record high of $3.5 billion in 2011 according to new data from global real estate investment consultancy Jones Lang La Salle in its Hotel Intelligence New York report. The 18-transaction total not only represents a 150% growth in New York hotel investment volumes since 2010 and not only made New York the top hotel investment market in the US by a 20% margin, but also the number one hotel investment market in the world.
Real Estate Investment Trusts dominated the market with 50% of acquisitions according to the data. Experts are predicting that New York will remain the strongest market in the world for hotel investment this year, however, the JLLS report predicts deal volumes will fall to 2.2-2.6 billion dollars this year, based on the flow of assets in disposition, with approximately a dozen single asset hotel transactions are expected to close in New York in 2012.
According to the data RevPAR in New York hotels increased by 7.4% in the year ending November 2011. Arthur Adler, Managing Director and Americas CEO of Jones Lang LaSalle Hotels said that strong fundamentals like that together with "quality product being brought to market and unprecedented REIT appetite" made for the perfect combination to drive strong transaction volumes
"During 2012, REITs have been less acquisitive since their share prices declined in mid-2011, but are continuing to look for opportunities to upgrade their portfolios," Adler added.
REITs now own approximately 20 percent of the room stock in New York according to another statement from Amelia Lim, Executive Vice President for Jones Lang LaSalle Hotels and leader of the firm's north-eastern U.S. advisory practice, which puts them among "the top three hotel owners in the City, along with owner/operators and private equity funds," she said.
Finally, the report predicts that hotel supply in New York will grow by 3.4% this year, with 17 new hotels bringing an additional 2,700 rooms into the market.
- Wednesday 01 February 2012