The Real Deal New York

NYC hotel sales reach all-time high in 2011

January 31, 2012 08:30AM

New York City hotel transaction volume hit a record high in 2011, according to a report released yesterday by Jones Lang LaSalle Hotels, with 18 transactions accounting for $3.5 billion in dollar volume. The figure represents a 150 percent increase over the $1.4 billion in hotel transactions recorded in 2010, and beat the firm’s prediction of $2.4 billion worth of hotel deals being inked in 2011.

“New York transaction activity in 2011 was driven by the perfect combination of strong operating fundamentals, quality product being brought to market and unprecedented real estate investment trust appetite,” said Arthur Adler, managing director and Americas CEO of Jones Lang LaSalle Hotels, in a statement.

One sign of the strong fundamentals was the 7.4 percent increase in revenue per available room that New York City hotels averaged through November 2011.

In fact, New York was the most liquid hotel market in the world, and totaled 20 percent of the country’s entire hotel sales volume. Though the report cited cooling interest from REITs because of declining share prices, it expected the city to hold on to the top spot in 2012 because it “has rebounded from the recession,” according to Adler. Institutional investors and private equity firms will contribute to the 12 hotels trades JLL expects for 2012, which will total between $2.2 billion and $2.6 billion — approximately 15 percent of America’s total.

Looking forward, the report said 17 new hotels would be brought to the city in 2012, pushing supply up by 3.4 percent or 2,700 rooms. — Adam Fusfeld