Briefly Noted
HOSPITALITY — Phoenix (29 percent), Detroit (23 percent), New York (23 percent), Atlanta (22 percent), and Miami (20 percent) experienced the sharpest 1Q09 U.S. major market declines in revenue per available room, according to Smith Travel Research. In addition these cities all have significant new supply coming on line this year.
INDUSTRIAL — Investment activity for 1Q09 was a lowly 8.5 million sf, one-fifth of industrial sales activity in 1Q08, according to Cushman & Wakefield.
MULTIFAMILY — The strongest net effective rent gains in history may occur between 2011 and 2015 as 75 million echo boomers finally can afford to strike out on their own, says RREEF Research. This pent-up demand along with a below-average supply, limited by financing constraints and fewer construction starts in 2010 and 2011, will boost rents quickly.
OFFICE — Two high-profile office tower foreclosures just one month apart seem to indicate that values for U.S. skyscrapers have dropped at least 25 percent, experts say. Holding a $130 million mezzanine loan on 1330 Avenue of the Americas in New York City, Otera Capital Corp. paid owner Harry Macklowe $100,000 for it and assumed its $240 million debt. A month earlier, Boston’s Hancock Tower was sold for $660 million, about half its 2006 purchase price.
RETAIL — Markets with the highest vacancy rates at the close of 1Q09 were Detroit (10.7 percent), Phoenix (10.3 percent), Columbus, Ohio, (10.3 percent), Kansas City, Mo. (10.1 percent), and Indianapolis (10.1 percent), according to CoStar Group.
Europeans Gamble at Home
Globally, at gaming hotels, the odds are against the house in this economy. However, U.S. casino hotels are losing at much higher stakes than European casino hotels, according to Smith Travel Research Global. In 4Q08, at U.S gaming hotels, occupancy, average daily rates, and revenue per available room plunged dramatically, with December 2008 RevPAR showing a 30 percent decline from the previous year. However, during the same period, European gaming hotels saw ADR and RevPAR post large increases in spite of significant occupancy declines: Both metrics increased 20 percent from November to December 2008. With Monte Carlo significantly closer than Las Vegas, many Europeans are choosing to gamble in their own backyards. As a result, U.S. casino hotel revenue is forecast to decline 8.4 percent by year-end, according to IBISWorld.
Worth Listening To
“First-time e-commerce shoppers are growing 6 percent per year — compared with the bricks-and-mortar channel, which is experiencing a decline. A lot of companies are increasing investments in the digital world because the e-commerce channel is more efficient and more measurable.”
— Tracy Mullin, president and CEO, National Retail Federation
