Hotel Development on the Rise
Bloomberg reports: Building a hotel in New York City is becoming more affordable than buying as demand from publicly traded investors helps drive a surge in property prices.
Increased competition for purchases has led developers to plan the opening of about 50 new hotels this year through 2013 in New York, more than triple the number in Washington. Sixty-eight more are set for completion in 2014 and after.
Hotel developers, many of whom stopped building in Manhattan and other New York boroughs when financing dried up during the recession, are returning following a gain in commercial-property prices, which are at their highest since a record reached in 2006.
Manhattan lodging properties sold for an average of $505,157 a room this year through Sept. 30, up from $344,799 for all of last year and $413,644 in 2009, according to global commercial property research firm Real Capital Analytics Inc. At the 2006 peak, the average was $632,894. Meanwhile, companies including DiamondRock Hospitality Co. (DRH) and Hidrock Realty Inc. are building hotels for $300,000 to $450,000 per room.
View the full article on Bloomberg: Hotel Development on the Rise
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Posted by: Nina Turner