(Bloomberg)—Investors have checked out of the New York lodging market.
No Manhattan hotels changed hands in the three months through January, according to Real Capital Analytics, as a growing supply of the properties limited owners’ ability to raise room rates. By comparison, about $1 billion worth of hotels traded in January 2019 alone.
Excluding Manhattan, transaction volume declined about 25% nationwide last month, reflecting a growing consensus that the hospitality business has run out of easy growth.
Revenue per available room, a key industry metric, is facing flat growth in 2020 for the first time in more than a decade, lodging data provider STR projected. In New York, average daily rates slipped 2.7% in January from a year earlier, according to STR.
“If you’re buying an asset and people are telling you that growth is going to be challenged, you’re not going to be willing to pay as much as in the past,” said Jim Costello, senior vice president at Real Capital Analytics. “Lenders are going to be skittish as well.”
There’s another factor that may weigh on asset sales in the coming months: Fears of the coronavirus are expected to further chill global travel demand.
To contact the reporter on this story: Patrick Clark in New York at [email protected].
To contact the editors responsible for this story: Craig Giammona at [email protected]
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