Developing Deadlock
Crain's New York Business reports: Across the country, the hotel sector is suffering more than any other property type, according to Real Capital Analytics. So far, Manhattan has fared better than elsewhere in the country. But experts say that could change quickly if room rates continue to fall and the frozen credit markets continue to eliminate the possibility of refinancing. Average Manhattan room rates fell 26% to $215 since the beginning of the year, according to Smith Travel Research. Lower rates have helped prop up occupancy levels, but revenue per room has dropped a precipitous 33% to $163 this year.
“I think we are going to see more foreclosures,” says John Fox, head of the New York office of hotel advisory firm PKF Consulting. “It is going be very difficult to find financing as hotels struggle with room rates.”
There are about seven hotel development sites in Manhattan that have stalled, been canceled or faced foreclosure, says RCA. Meanwhile, three properties stopped making their mortgage payments, including the Dream Hotel, a 220-room luxury property on West 55th Street.
View the full article on Crain's New York Business: Developing Deadlock
Posted by: Mark Alferman