Hotel investment volumes in Manhattan doubled last year compared to 2010 according to the latest release of data on the sector from CB Richard Ellis. According to the firm 27 hotels were traded in 2011 in deals worth a total $3.8billion.
This was part of a generally strong performance recorded by CBRE in its winter snapshot report, as well as strong predictions for this year in the sector.
"Manhattan hotel investment sales rebounded significantly in 2011, and 2012 is expected to be a strong year as well," said Bradley Burwell, senior associate, CBRE Hotels. "Fundamental lodging performance remains strong, and despite the addition of more than 4,100 units in Manhattan in 2011, occupancy remained constant at 84%, clearly showing that the city can continue to absorb new supply."
The addition of 4,100 units not only failed to have an impact on occupancy, which as Burwell said remained steady at 84%, but it also never impacted RevPAR (Revenue per Available Room), which grew 5.6% to $232 in 2011, or ADR (Average Daily Rate) which grew 5.7% to $276.
This shows strong demand, growing as 2011 progressed. CBRE predict that this growth will continue and even intensify in 2012. In the same report, CBRE Econometric Advisors (CBRE EA) forecast that the New York metro region hotel occupancy rate will increase 60 basis points to 81% this year, while ADR will increase 4.5% to $243 and RevPAR will increase 5.4% to $197.
CBRE EA forecast that hotel occupancy will remain flat on a national basis during the same period, at 65.9%, while nationally ADR will increase by 3.8% to $124 and RevPAR will increase by 3.8% to $81.
- Wednesday 07 March 2012