Category: Hotels & Short Term Rentals

Exclusive Research: Navigating an Evolving Hospitality Sector

Investors point to opportunities and challenges as part of NREI’s first exclusive research on hospitality real estate.

The hospitality sector is notoriously the most volatile of real estate asset classes. Business and leisure travel trends are highly correlated to broader economic conditions. And the sector does not have the benefit of long-term leases to help soften the blow of cyclical swings.

The effects of that fundamental nature of the sector are evident in our first exclusive research examining hotel investment. As a result, while the numbers are bullish and generally consistent with what NREI has found for other property types, that level of optimism is more muted. Moreover, the rise of third-party room and home sharing apps like Airbnb and VRBO is a growing concern for the sector and its outlook.

Overall, 76.9 percent of respondents pointed to those services as having an impact on the sector. Respondents had a lot of thoughts on these services in open-ended responses as well.

“There will be continued pressure on occupancy for extended stay and all-suite hotels from Airbnb, etc.,” one respondent wrote. Another added that a challenge for hotels is that owners will “have to differentiate from what can be found on Airbnb and VRBO.”

Click Here For The Full Article

SUBSCRIBE TO OUR NEWSLETTER

Start receiving; press releases, commercial real estate news, information and trends on particular markets and regions.


Picture: Pixabay

Demand for Corporate Housing Continues to Rise

Short-term housing options can be a win-win for all parties involved.

No matter the type of multifamily you own, from luxury units to Class B multifamily, you’ve likely heard the term “corporate housing” or “temporary housing.” This refers to fully furnished and fully serviced temporary housing units available for short-lease terms. A few years ago, we saw this trend take the industry by storm, with employees on out-of-town business topping the list of reasons for high demand. Since then, its popularity has only risen. Corporate housing is now considered a viable option for many renters, including millennials and Generation Z looking to hold off on buying a home, empty nesters, seasonal travelers and expatriates, military and government personnel, and many more.

From 2014 to 2018 alone, corporate housing experienced a 12% combined annual growth rate from $64 billion to $101 billion, in comparison to the 3% hotels experienced in the same timeframe. With growth like this, many apartment owners are eager to expand as major players for corporate relocations—resulting in healthy competition within this market. However, in today’s climate owners are wise to take a deeper look at the trend to not only reap success but enhance its value for renters, major employers, and the general community.

Click Here For The Full Article

SUBSCRIBE TO OUR NEWSLETTER

Start receiving; press releases, commercial real estate news, information and trends on particular markets and regions.


Picture: Pixabay

Blackstone Is in Talks to Buy the Bellagio and MGM Grand

The private equity firm is negotiating to be the buyer in the sale leaseback of the two casinos.

(Bloomberg)—Blackstone Group Inc. is in advanced talks to buy and lease back the iconic Bellagio and MGM Grand Las Vegas casinos from MGM Resorts International, according to people with knowledge of the matter.

They have yet to agree on a transaction and one may not be reached, said the people, who requested anonymity because the talks are private. The terms of the potential deal couldn’t be learned.

Representatives for Blackstone and MGM Resorts declined to comment.

MGM Resorts shares rose as much as 5% before settling up 1.4% to $29.47 at 12:06 p.m. in New York.

MGM Resorts has been exploring selling and leasing back the properties individually or bundled together, Bloomberg News reported in July. Property sales free up cash for casino companies to expand while letting them continue to manage their resorts.

Click Here For The Full Article

SUBSCRIBE TO OUR NEWSLETTER

Start receiving; press releases, commercial real estate news, information and trends on particular markets and regions.


Picture: Pixabay

Developers Claim Co-Living Suites Earn More Per Square Foot Than Regular Apartment Rentals

Co-living developers in New York and Washington, D.C. report strong demand from renters.

Hundreds of co-living suites are renting quickly at ALTA LIC, a new high-rise apartment building in Long Island City, Queens.

“We are now about four months ahead of our expected pace,” says Christopher Bledsoe, co-founder and CEO of Ollie, the company managing the ALTA’s co-living apartments.

Companies like Ollie are proving that there is plenty of renter demand for co-living arrangements. The co-living spaces at ALTA are now earning more dollars per sq. ft. than the new conventional apartments in the same building. Other operators of co-living properties also report strong results at their projects.

Click Here For The Full Article

SUBSCRIBE TO OUR NEWSLETTER

Start receiving; press releases, commercial real estate news, information and trends on particular markets and regions.


Picture: Pixabay

The Hospitality Sector Sees the Entrance of a New Competitor: Upscale Glamping Hotels

Neil Dipaola, of outdoor lodging brand AutoCamp, talks about the company’s plans for a nationwide network of upscale trailer hotels.

Outdoor lodging brand AutoCamp recently raised $115 million through a partnership with real estate private equity firm Whitman Peterson to open a nationwide network of hotels created from Airstream camper trailers manufactured by Thor Industries Inc. The firm plans to use the money to buy the land for the sites and customize the trailers. The agreement with Whitman Peterson includes a provision for potential expansion funding of another $115 million in the future.

In the developers’ vision, this new hotel network, built around the recently emerged concept of “glamping,” will combine a full-luxury hotel experience with high-end trailers in a natural environment, with all the attractions of camping without any of the fuss.

At the moment, demand for innovative travel experiences is trending high, according to Peter Nichols, national director of the hospitality group with real estate services firm Marcus & Millichap. “We don’t think glamping is going away. It’s a major segment of the hotel market now.”

Click Here For The Full Article

SUBSCRIBE TO OUR NEWSLETTER

Start receiving; press releases, commercial real estate news, information and trends on particular markets and regions.

Picture: Pixabay

Dom Beveridge The Supply and Demand Sides of Short Term Rentals

Sometimes new technologies and strategies change the way that we do business. More frequently, though, things that have worked in one industry find their way into other sectors, leading to fresh innovation. In multifamily, it is often the hotel industry that supplies some of the most plausible new ways to sell, market and deliver the experiences that define our industry. In the weeks since OPTECH 2018, there has been much discussion about short-term rentals. An array of vendors has emerged across the value chain – from apps that make it easy to rent out your apartment to platforms that run entire apartment buildings as if they were hotels. Demand for short-term rentals is growing rapidly, and business models are changing as we see shifts in both the demand and supply sides of the business. A few years ago I wrote a piece for Multifamily Insiders on the rise of Apartments.com and the parallels I saw with the growth of the Online Travel Agents (OTAs) like Expedia and Priceline and their impact on the hotel industry. At the time, an unprecedented escalation in spending on apartment marketing was raising the profile of the sector (including buying ad spots in the Superbowl!). Multifamily Internet Listing Sites (ILSs) seemed to be taking greater control of the customer. As I argued, it reminded me of the dynamic in the lodging sector, where OTAs had developed a value proposition that competed with traditional hotel companies and their websites.

Click Here For The Full Article

SUBSCRIBE TO OUR NEWSLETTER

Start receiving; press releases, commercial real estate news, information and trends on particular markets and regions.

Picture: Pixabay

Hotel Icon Ian Schrager Thinks Communal Living Is the Future

Co-living spaces are blurring the distinction between hotels and apartment buildings, according to hotelier Ian Schrager.

(Bloomberg)—The next big disruptor in hospitality, according to Ian Schrager, is co-living spaces.

“Communal living is blurring the distinction between residential and hotels,” the hotelier and Studio 54 co-founder argued during Bloomberg’s Year Ahead: Luxury conference in Manhattan on Thursday.

The mastermind behind the Public Hotel urged audiences to look at millennial buying statistics as evidence of this trend, which has seen growth in so-called co-living, where residents buy into furnished, semi-serviced apartments, either by the unit or by the bedroom. These are sort of communes for digital nomads with pop design, Casper mattresses, Nest thermostats, and other covetable accoutrements of the startup set. Critics have called them “dorms for adults,” while more evangelical residents praise them for the instant community they create.

“When I was growing up, I couldn’t wait to get a car!” Schrager said, comparing millennials’ lack of interest in cars to their evolving living habitats. “Now my daughters don’t want a car.” Relying on Uber and Lyft or car-sharing pilots from Porsche, BMW, and Mercedes was once unthinkable—now it’s de rigueur. “It’s just things are changed,” he said.

Click Here For The Full Article

SUBSCRIBE TO OUR NEWSLETTER

Start receiving; press releases, commercial real estate news, information and trends on particular markets and regions.

Picture: Pixabay

Scroll to top