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New York Hotel Occupancy Rises But Investment Sales Decline
New York City’s hotel occupancy rate climbed 120 basis points in 2017, well ahead of the 40-bp increase statewide, according to Marcus & Millichap. Tourism to the city hit a new record high last year, and a new ad campaign designed to encourage longer stays could bode well for the lodging sector this year.
That being said, Marcus & Millichap noted fewer investment sales across the New York City metro area over the past two years. In particular, the firm said fewer select-service assets changed hands across New York City during the period, with the majority of hotel sales in this segment occurring in Manhattan.
“Institutional investors primarily targeted these properties, which traded with average first-year returns in the mid-5% to low-7% band,” according to Marcus & Millichap’s 2018 Investment Forecast. “A surge in construction for upscale and upper midscale hotels could provide buyers with additional opportunities for select-service assets.”
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