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Report: Manhattan Hotel Real Estate Transactions to Double in 2011

According to the _Hotel Intelligence New York_ report from ""Jones Lang LaSalle Hotels"":http://www.joneslanglasallehotels.com, hotel deal volume in Manhattan will range from $1.9 billion to $2.4 billion in 2011.
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Manhattan is the most active hotel transaction market in the country. This is the fourth in-depth market analysis in a series of U.S. hotel market reports from Jones Lang LaSalle Hotels, a global hotel investment services firm, analyzing the driving trends in the hotel investment market.

""Hotel transaction levels in Manhattan totaled nearly $12 billion over the past decade, exceeding $1 billion in 2010 alone,"" said Arthur Adler, managing director and CEO-Americas for Jones Lang LaSalle Hotels. ""In 2011, we expect hotel deal volume to increase by 90 to 130 percent over last year's levels.""

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The company used the estimated transaction value of properties currently on the market that are expected to transact during the course of the year for the analysis.

The report credits the increase in transaction volume to the dramatic recovery in revenue per available room (RevPAR), continued improvement in the debt markets, investors' intention to sell assets before the 2007-2012 loan terms expire, and currency movements.

""REITs [real estate investment trusts] will continue to be active buyers because their cost of capital is very competitive relative to buyers who rely on leverage,"" said Adler. ""Foreign investors, particularly investors from the Middle East and Asia, will also likely be active, seeking to establish a foothold in the market. Brands are also apt to make selective investments in 2011 and beyond to establish or increase their presence or to reposition their properties.""

Active sellers in 2011 will include institutional funds seeking liquidity, brands in cases where they can improve their assets and retain management contracts, and investors seeking to exploit the improving transactions market and low cap rates.

Manhattan hotels posted the highest growth rates of any major U.S. market in 2010. The report reveals that Manhattan is expected to remain the top U.S. hotel investment market, attracting attention from domestic and off-shore buyers.

About Author: Heather Cernoch

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