In the 24 months following September 2008, when Lehman Brothers Holdings Inc. failed, contributing to the U.S. recession, hotels fetched prices as much as 71 percent higher than during the lodging industry’s peak, according to New York- based Real Capital.
The JW Marriott New Orleans sold in February of this year for $94.3 million, up from the $55 million price paid in January 2008. The Hilton Garden Inn Chelsea in New York City sold in September 2010 for $68.4 million, 24 percent higher than its $55 million price in October 2007, Real Capital said.
Values have gained even outside major cities. The Holiday Inn in Oak Hill, West Virginia, sold for $3.5 million in July 2010, up 40 percent from when it last sold, in September 2007.
“Pricing is pretty aggressive,” Barry Sternlicht, founder of real estate investor Starwood Property Trust Inc. (STWD), said in an interview at the New York University International Hospitality Industry Investment Conference in New York on June 6. “Even for generic hotels you get 20, 30 bids.”
‘Well Below’ Peaks
Daily room rates averaged $94.05 last year, and revenue per available room, an industry measure of occupancy and rate, was $42.40, according to Real Capital. That’s “well below” the 2008 peaks of $106.65 and $54.42, said Ben Thypin, an analyst at the firm.
Read more: http://www.bloomberg.com/news/2011-06-24/hotel-buyers-inflate-property-prices-as-values-outpace-u-s-lodging-demand.html
Once closed, Macklowe's acquisition will be the most expensive residential building purchased for conversion since Maurice Mann and Africa Israel bought the Apthorp for $391 million in 2007, data from Real Capital Analytics shows. The deal marks the return of developers doing large-scale luxury condominium conversions following the real estate downturn.
"This is a litmus test [for whether] a condo conversion is a viable strategy for the next few years," said Ben Thypin, senior market analyst at Real Capital Analytics. "This is a pretty bold move for [Macklowe]. If he can execute, that's great, he's still got it. But if he can't, I don't think that will surprise many people, because his basis is so high."
Read More: http://therealdeal.com/newyork/articles/penciling-out-737-park
Ben Thypin, director at Real Capital Analytics, pointed to comparable sales on 69 apartment transactions in Tennessee last year fetching an average of $33,319 per unit. That jumped to $55,111 on sales so far in 2011, despite those being larger transactions and a dearth of data fro the Jackson-specific area. "The $49,000 to $53,000 per unit that Island Capital Group paid for these properties sounds reasonable," he said.
It is unknown if other bidders participated in the April sale or what metrics were used to appraise the assets. The FMV option trend was first tipped to come into vogue last year by sister publication Real Estate Finance & Investment, with market players warning that the FMV option could be used by servicers to get a first stab at distressed real estate.
"C-III seems to me to be the most prominent instance," Thypin said. "I'm sure others intend to do it as well. It's likely one of the primary reasons for groups like Island and Fortress (Investment Group) to buy servicers - it's a front row seat to buying these distressed properties."
Read More: (Subscription Required) http://www.totalsecuritization.com/Article/2846526/CMBS_Servicer_Exercises_Purchase_Option.html
Bank failures, of course, are not always a bad thing – especially if their assets are purchased by institutions that can better manage them. Further consolidation in small and middle market banks could lead to more stable, regional banks, said Ben Thypin, director of market analysis at Real Capital Analytics.
Read More: http://www.thefiscaltimes.com/Articles/2011/06/08/Bad-Commercial-Loans-Could-Sink-More-Banks.aspx
“Industrial is a steady performer and isn’t correlated to other sectors,” said Ben Thypin, director of market analysis for New York-based Real Capital. “It didn’t get hot during the boom, and didn’t drop much during the crash.”
Read More: http://www.bloomberg.com/news/2011-06-03/prologis-to-double-asia-property-after-completing-biggest-u-s-reit-merger.html
Ben Carlos Thypin
I am currently the co-founder of Quantierra, the world's first data driven real estate brokerage and investment manager. In my former life as Director of Market Analysis at Real Capital Analytics, I worked with press outlets large and small to provide them with great data and insightful commentary. Here are some of the results of this collaboration. For the rest, please check out the News Archive.