Investor Interest in San Francisco is Here to Stay, Reports Jones Lang LaSalle Hotels (United States)
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Investor Interest in San Francisco is Here to Stay, Reports Jones Lang LaSalle Hotels (United States)
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Category: North America & West Indies / Carribean islands - United States - Industry economy -
Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2008-09-03
Newly renovated product will allow hotels to emerge more strongly once transactions pick up
In a recent report on San Francisco’s hotel investment market, Jones Lang LaSalle Hotels states that with three-quarters of upper-upscale hotels recently undergoing a renovation, San Francisco is a model of what can be done during the current market environment to maximize revenues, allowing investors to enhance value and give way to a stronger post-crunch market position. The firm recently published Hotel Intelligence: San Francisco.
The illiquidity in the debt markets has many investors taking a “wait and see” approach, but San Francisco is experiencing strong investor interest. What makes San Francisco unique is the widespread focus on renovation. “Already a front-runner in year-to-date RevPAR gains, San Francisco's investors are focusing their attention - and dollars - on capital improvements, which will lift the ADR ceiling even higher, and will give way to a stronger position once transaction levels accelerate,” said Kristina Paider, senior vice president of research and marketing for Jones Lang LaSalle Hotels. With few hotels are up for sale, investors are focusing on income enhancement.
As a top U.S. and international destination that continues to attract significant investor interest, San Francisco's hotel market is characterized by high barriers to entry and superior fundamentals. San Francisco’s supply pipeline remains benign due to the scarcity of development sites and high land and construction costs. Only four new hotels opened in San Francisco since 2004.
San Francisco’s RevPAR growth projection through 2010 outperforms that of Chicago, Los Angeles and Washington, D.C. “With plenty of newly renovated product along with the weakness of the dollar and a strong convention year ahead, San Francisco’s hotel market is in a sound position to weather the economic softening,” said Anwar Elgonemy, senior vice president for Jones Lang LaSalle Hotels.
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