If you’re considering the purchase of a hotel investment, these 5 cities show positive trends in retail growth, which indicates more discretionary income, and are among the top 15 markets for higher occupancy rates YTD.
1. Los Angeles
2. Houston
3. New York
4. Seattle
5. Orlando
While Millennials are showing traction towards indie hotels (for a unique experience) the demand is higher for branded hotels. Demand is above supply with the highest growth shown in the upper upscale segment:
Midscale: 48.8%
Upper Midscale: 43%
Upscale: 46%
Upper Upscale: 51%
The long view: hotels have shown 10+ percent NOI growth for the past 5 years in a row and an average 20% ADR growth since 2010. The arbitrage between Cap rates & the 10-Year Treasury is about 500 bps, and is expected to continue into mid-2018, making hotels an attractive investment!
If you are interested in a feasibility study of a specific market segment, please contact me for a proposal.
Sources: Marcus & Millichap Research Services, Smith Travel Research, LVCVA
Image Source: Freeimages.com
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John W. Tanner became a published author in 1994 with a poem titled “Above the Sea.” In 2012, he wrote and self-published a modern fiction novella entitled “Faithfully” and has since published four other fiction and nonfiction works on Amazon's CreateSpace and Kindle Direct Publishing, including his recent publication titled “Entrefluential Networking in Real Estate” (available at https://www.amazon.com/dp/B086VFV4SN), a self-help textbook on advanced real estate marketing and brand development strategies. John holds a Juris Doctor degree from Florida Coastal School of Law, a Master of Science from Florida International University, a Bachelor of Science, with concentrations in literature and computer science, from Excelsior College, an Associate in Arts from Miami Dade College and has extensive experience in the fields of real estate appraisal, mortgage finance, and sales.
He is the Broker-Owner of Coleman Tanner Realty in Florida, as well as the Executive Director and Chief Legal Officer of REX Cinema Productions.
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