Room Keys

Room Keys Hotel execs are smiling these days as room rates and occupancy rates ratchet up and the hospitality business continues its strong recovery. Evidence of the rebound is reflected in hotel trades that are being announced weekly, and the biggest news has been in New York City with the announcement of Northwood Investors’ agreement to buy the Palace Hotel. This is on the heels of the Radisson Lexington Hotel and the New York Helmsley changing hands recently. Meanwhile, Felcor REIT is also under contract to buy the Royalton and Morgans hotels. This flurry of activity is consistent with the boom-bust cycle of the hospitality sector. Thus far we have not seen any new development, but there are rumblings that new hotel starts may emerge, especially as part of larger mixed-use ventures. Multifamily is already leading the new development cycle, and I expect we will hear about action on the hotel front sooner than you think. Developers, sit up and take notice!