Hotel assets continued to appreciate in 2016, but at a more modest pace due to slowing RevPAR growth and a rise in cap rates. The stock market rally following the election has led to cautious optimism about what 2017 will bring.
The San Francisco hotel market experienced strong momentum in 2016, matching the city’s vigorous economy.
Although the development pipeline is anticipated to expand, the construction and opening of new hotels should continue at a modest pace.
Each year, HVS researches development costs from our database of actual hotel construction budgets, industry reports, and franchise disclosure documents. These sources provide the basis for our range of component costs per room.
ALIS presentation featured in the "Numbers" panel discussion on January 28, 2014, provides a recap of national market activity in 2013, covers current/recent cap rates, examines cap ex impacts on hotel cap rates/values, and gives an outlook for 2014.
Hotel capitalization rates are stabilizing due to the counter balancing forces of a healthy transaction
market, a shortage of product for sale, the low cost of capital and the slowing of net income gains.