According to a new special research report from the JLL New York Research and Hotels teams, New York is the most liquid hotel market in the world. 2015 marked the city’s highest volume of transactions and highest-priced transaction on a per-room basis. Hotel performance will be under pressure in 2016 and 2017, given the city’s elevated supply pipeline, economic volatility in major source markets and the impact of home-sharing sites, but New York is expected to remain hotel investors’ top global target. While 2015 hotel transaction volume set a new high-water mark, JLL expects to a see a more normalized level of transaction activity in 2016.
Though 2015 was a year of records, 2016 is predicted to be more normalized. Following record-breaking transactions in 2015, investors have a more cautious outlook for New York in 2016. Headwinds include impending new rooms, economic weakness in key tourism source markets and activity from home-sharing sites. Now is an opportune time to assess hotel investments in New York, as the new supply will likely get absorbed by mid-2018, setting the stage for a rebound in growth. With a record number of over 30 hotels listed for sale, coupled with REITs being less acquisitive at the moment, competition among buyers in the market is reduced. This presents investment opportunities for groups that can weather temporary RevPAR softness to capture out-sized gains in the years ahead.
The Hotel Intelligence Report covers topics ranging from large-scale developments that are changing urban fabrics, the record number of visitors slated for 2016, to a transaction outlook for 2016 that shows activity remaining strong. The emergence of the outer boroughs, according to the report, also contributes to a dramatic transformation in tourist destinations and patterns.
To view more New York Research, visit their website here.
To view the entire report, click here.