Four hotels entered the market during 2005. Three of the properties opened in the Times Square area: the 140-room Hotel QT in January, the 125-room Holiday Inn Express in September (the first hotel affiliated with the Holiday Inn Express brand in Manhattan), and the 357-room Residence Inn in December (the first hotel affiliated with the Residence Inn brand in Manhattan). The fourth hotel, a 136-room Hampton Inn, opened in February near Madison Square Garden, and represented the second hotel affiliated with the Hampton Inn brand in Manhattan.

In addition, two properties were reflagged. In August 2005, the 300-room Hampton Inn Times Square opened on Eighth Avenue, between West 51st and West 52nd Streets; previously, the hotel was affiliated with the Howard Johnson brand. The former Days Hotel located on Eighth Avenue, between West 48th and West 49th Streets, reopened as a 369-room Hilton Garden Inn in November 2005.

The following table lists some of openings of new hotels, as well as the reopening of hotels in Manhattan in recent years.

Name of Hotel	Location	Type	No. of Rooms	Opening Date	Developer/Comments
Midtown West
Herald Hotel	34th St. & Broadway, SE corner	Extended-Stay	60	Jan-00	JEMB Realty
Red Roof Inn	6 West 32nd Street	Economy	171	Jun-00	Apple Core Hotels
Hilton Times Square	42nd St. (between 7th & 8th Aves.)	Upscale	455	Jun-00	Forest City Ratner
Sofitel	44th St. (between 5th & 6th Aves.)	Upscale	398	Jul-00	Accor
The Muse	130 West 46th Street	Boutique	200	Aug-00	Cornerstone
Hudson Hotel	57th St. (between 8th & 9th Aves.)	Mid-scale	810	Nov-00	Ian Schrager Hotels
Bryant Park Hotel	40th St. (between 5th & 6th Aves.)	Boutique	130	Feb-01	Pilevsky & McNally
The Chambers Hotel	56th St. (between 5th & 6th Aves.)	Boutique	77	Feb-01	Ira Drukier and Richard Born
Comfort Inn	442 W. 36th (between 9th & 10th Aves.)	Economy	56	Jun-01	Heena Hotel, LLC
W Times Square	47th St. & Broadway (SW corner)	Boutique	509	Dec-01	Intell Real Estate/Starwood
Best Western	522-24 W. 38th St. (bet. 10th & 11th Aves.)	Economy	83	Jan-02	Unigroup Hotel, LLC
City Club Hotel	55 West 44th Street	Boutique	65	Jan-02	Metropolitan Hotels, LLC
Ritz-Carlton	50 Central Park South	Luxury	277	May-02	Millennium Partners
Hotel 41	216 West 41st Street	Boutique	47	Aug-02	Private Investment Group
Westin Times Square	270 43rd St. & 8th Avenue	Upscale	863	Oct-02	Tishman Urban Development Corporation
La Quinta Inn Manhattan	17 West 32nd Street	Economy	182	May-03	Apple Core Hotels
Hampton Inn	W. 24th Street� (between 6th & 7th Ave.)	Mid-scale	144	Aug-03	Hersha Hospitality
Mandarin Oriental	10 Columbus Circle	Luxury	251	Nov-03	Related Co./Mandarin Oriental Hotels
Sheraton Four Points	West 25th Street	Mid-scale	158	Dec-03	Unigroup Hotel, LLC
Dream Hotel (formerly Majestic)	210 West 55th Street	Boutique	220	Oct-04	Reopened following extensive renovation
Midtown East
Thirty Thirty	East 29th St. (bet. Park & Lexington Aves.)	Mid-scale	251	Jul-00	PMG
Library Hotel	299 Madison Ave. at 41st St.	Boutique	60	Aug-00	Henry Kallan
Dylan Hotel	52 East 41st Street	Boutique	107	Oct-00	Morris Moinian/Allied Hospitality
Park South Hotel	122 East 28th Street	Boutique	143	Sep-01	Atlantic Stars
Le Marquis	12 East 31st Street	Boutique	123	Sep-01	Le Marquis Associates
The Alex	205 East 45th Street	Boutique	203	Sep-03	Izak Senbahar/Simon Elias
The San Carlos - Reopened	150 East 50th Street	Boutique	147	May-03	San Carlos Hotel, Inc.
70 Park Avenue Hotel	70 Park Avenue	Boutique	205	Jul-04	Kimpton Hotels
SoHo/Lower Manhattan
Tribeca Grand	6th & White Streets	Boutique	203	May-00	Hartz Mountain Industries
W Hotel	Union Square, Park Ave. So. & 15th St.	Boutique	270	Nov-00	Starwood/Related Cos.
60 Thompson St.	60 Thompson Street	Boutique	101	Feb-01	Pomeranc Group
Howard Johnson�	135 East Houston	Economy	46	Dec-01	Metro One Hotel, LLC
Maritime Hotel	Ninth Ave (between 16th and 17th Sts.)	Boutique	125	Jun-03	Private Developers
Hotel Gansevoort	Ninth Ave and 13th Street	Boutique	187	Mar-04	WSA Management, Ltd.
Solita Hotel	159 Grand Street	Mid-scale	42	Aug-04	SoHo Grand Center, LLC
Hotel on Rivington	107 Rivington Street	Boutique	110	Oct-04	Paul Stallings
Downtown
Embassy Suites	Battery Park City	All-Suite	463	Jun-00	Forest City Ratner
Ritz-Carlton Battery Park	2 West Street	Luxury	298	Jan-02	Millennium Partners
Marriott Financial Center - Reopened	85 West Street	Upscale	504	Jan-02	Host Marriott Corporation
Embassy Suites - Reopened	Battery Park City	All-Suite	463	May-02	Forest City Ratner
Millenium Hilton - Reopened	55 Church Street	Upscale	565	May-03	CDL Hotels

As illustrated in the preceding table, the majority of the new supply in Manhattan since 2000 has been in the form of boutique properties. Overall, boutique hotels represent 21 of the 46 hotels that opened/reopened in Manhattan between 2000 and 2005. However, the boutique hotels represent only approximately one-third of the guestrooms that entered the market during that period. This dynamic is attributable mainly to the nature of the boutique hotels, which in general, contain fewer guestrooms than hotels in the other categories, with the exception of the W-branded properties. It is noteworthy that none of the boutique hotels opened or reopened in either Downtown or on the Upper East Side.

The following table illustrates recent and potential hotel closings.

Name of Hotel	Location	Type	No. of Rooms	Closing Date	Comments
Midtown West
The Helmsley Windsor Hotel	100 West 58th Street	Upscale	(240)	Nov-03	Conversion to residential use
Inter-Continental CPS	112 Central Park South	Luxury	(211)	Jun-04	Conversion to residential use
The Plaza	Fifth Avenue at Central Park South	Luxury	(457)	May-05	Partial conversion to residential use
Wyndham	W. 58th Street	Mid-scale	(209)	Jul-05	Conversion to residential use
Midtown East
Sheraton Russell	45 Park Avenue	Upscale	(146)	2006	Conversion to residential use
Upper West Side
Empire Hotel*	44 West 63rd Street	Mid-scale	(381)	Dec-03	Expected to reopen by Jan. 1, 2007
Mayflower	15 Central Park West	Mid-scale	(365)	Oct-04	Conversion to residential use
Upper East Side
Hotel Delmonico	Park Ave. and 59th Street	All-Suite	(152)	Apr-02	Conversion to residential use
Stanhope Park Hyatt	995 Fifth Avenue	Luxury	(185)	Feb-05	Conversion to residential use
The Melrose Hotel	140 East 63rd Street	Boutique	(306)	Jun-05	Conversion to residential use
Downtown
Regent Hotel	55 Wall Street	Luxury	(144)	Feb-04	Conversion to residential use
Total			(2,796)
Excluding Empire Hotel			(2,415)

Ten hotels closed for full or partial condominium conversions from April 2002 through 2005, accounting for a total of 2,415 guestrooms, or roundly 3.8% of the 2005 room inventory. These conversions reflect the strength of the Manhattan condominium market. We note that the condominium conversions were primarily limited to upscale residential neighborhoods, mainly around Central Park, where land and buildings are in short supply and condominium prices are high. These properties were all upscale or luxury in nature. Given the limited number of upscale/luxury lodging facilities available for condominium conversion, as well as the strength of the Manhattan lodging market, fewer conversions should occur in the next few years. The Empire Hotel, which was originally acquired for conversion to residential use, is currently being renovated and is slated to reopen as a mid-scale hotel by January 2007.

It is worth noting that Elad Properties acquired the 805-room Plaza in October 2004, and at the time of this survey, the plans were to convert the Plaza into a mixed-use development containing ±181 luxury condominium units, ±108,000 square feet of high-end retail space, three food and beverage outlets, and a 130-unit transient luxury hotel and a 152-unit condo hotel. The plans also called for the preservation of the Plaza’s Palm Court, Oak Bar, and Ball Room. In addition, the 185-unit Stanhope Park Hyatt closed in February 2005 in connection with its sale for condominium conversion, while the 306-room Melrose closed on June 30, 2005, for conversion to luxury condominiums. Furthermore, the 209-room Wyndham Hotel closed in July 2005, and is expected to be converted to residential use.

The 495-room Swissotel, Drake New York, at 56th Street and Park Avenue, is under contract to be sold. The property reportedly will be demolished to make way for a new 70-story, mixed-use residential condominium. Three lodging facilities affiliated with Affinia Hotels are currently on the market and reportedly will be converted to rental or condominium apartments: the 172-room Beekman Tower, located a block from the United Nations; the 254-room Shelburne Murray Hill, at 37th Street and Lexington Avenue; and the 131-room Surrey Hotel, at 76th Street and Madison Avenue. If all four properties are converted to residential use, a total of 1,052 rooms will be taken out of inventory in 2006.

PROPOSED HOTELS

As illustrated in the following table, as many as 3,119 rooms, or 19 properties, may enter the Manhattan market in 2006 and 2007. It is important to mention that even though the Manhattan lodging inventory declined in 2004 and 2005, supply is expected to continue to grow in 2006 and 2007, albeit at a slow pace.

Most of the anticipated new supply represents limited-service hotels, while seven of these properties can be classified as boutique hotels. It is interesting to note that no new lodging facilities have been proposed for the luxury segment apart from the reopening of the significantly smaller Plaza Hotel in 2007. Significant barriers to entry, including high construction costs, prohibitive land costs, and a lack of available sites, continue to remain key factors when considering construction of lodging facilities in Manhattan. Thus, only the most financially feasible projects are likely to reach fruition. The following table sets forth the number of new rooms that are anticipated to become available during 2006 and 2007.

Project	Location	Type	No. of Rooms	Anticpated Opening	Developer	Rating
Midtown West
Comfort Inn	39th Street & Eighth Ave.	Mid-scale	80	Dec-06	Metro One Hotel, LLC	3
Wingate Inn	35th Street (between 7th and 8th Ave.)	Mid-scale	92	Mid 06	Private Developer	5
Holiday Inn Express	29th Street & Seventh Ave.	Mid-scale	233	Mid 06	Metro One Hotel, LLC	3
Plaza Hotel	5th Avenue at Central Park South	Luxury	282	Jan-07	Elad Properties	5
Fairfield Inn	40th Street (between 8th and 9th Ave.)	Mid-scale	248	Late 07	Lam's Group	3
Four Points	40th Street (between 8th and 9th Ave.)	Mid-scale	248	Late 07	Lam's Group	3
Sheraton	28th Street (between 7th and 8th Ave.)	First Class	175	Late 07	Lam's Group	2
Midtown East
Fifth Avenue	373 Fifth Avenue	Boutique	60	Mid 06	Hersha Group	5
Gramercy Park Hotel	2 Lexington Avenue	Boutique	300	Mid 06	Morgans Hotel Group, LLC	5
Upper East Side
Courtyard by Marriott	92nd Street and First Avenue	First Class	226	Mid 06	Madison Equities	5
Courtyard by Marriott	E 123th Street	First Class	204	Late 07	Majic Development Group	3
Downtown
Blue Moon Hotel	100 Orchard Street	Boutique	22	Feb-06	Randy Settenbrino	Open
Hampton Inn Seaport	320 Pearl Street	Mid-scale	65	Mar-06	Hersha Group	Open
Downtown Hotel	TriBeCa	Boutique	83	Mid 06	Robert De Niro	5
The Loft	130 Duane Street	Boutique	45	Mid 06	Hersha Group/Sam Chang	5
Hilton Garden Inn	York St. and Avenue of the Americas	Mid-scale	150	Aug-06	Metro One Hotels, LLC	5
Four Points by Sheraton	66 Charlton Street and 7th Avenue	Mid-scale	150	Mar-07	SoHo Village Hotel, LLC	5
Allen Street*	Allen Street (bet. Houston and Stanton)	Boutique	112	Late 06	Jason Pomeranc	5
Standard NYC	W 13th St. (bet. Washington and West)	Boutique	344	Late 07	Hotels AB	5
Total			3,119

1	=	Planning Stage
2	=	Rumored development, less than 50% chance of reaching fruition
3	=	Land acquired, no financing in place, likely to occur
4	=	Financing in place, not under construction
5	=	Under construction
*Including 32 hotel condominiums