RATING ROOM VALUES
Shopping for hotel properties? New York tops all cities with an average value per hotel room of $240,000 — triple the national average. Value per room is arrived at by dividing the market value of a hotel by its number of rooms.
| Value Per Room | |
|---|---|
| 1. New York | $240,000 |
| 2. San Francisco | $203,000 |
| 3. Las Vegas | $177,000 |
| 4. Oahu, Hawaii | $158,000 |
| 5. San Jose, Calif. | $156,000 |
| 6. San Diego | $151,000 |
| 7. New Orleans | $143,000 |
| 8. Boston | $133,000 |
| 9. Long Island, N.Y. | $130,000 |
| 10. Washington, D.C. | $124,000 |
| Average U.S. | $73,000 |
| Source: HVS International | |
SIGNS OF A SLOWDOWN IN OFFICE…
The construction pipeline is emptying as demand for office space remains tepid. Weak corporate earnings and hiring has dampened the need for office space. The good news is that excess inventory is not being created. At the end of the first quarter of 2002, 2.5% of the total inventory was under construction, compared with 4.1% in the first quarter of 2001. Numbers include speculative and build-to-suit space.
ALL-DAY RUSH HOUR
Anthony Downs, senior fellow at the Brookings Institution and author of “Stuck in Traffic,” says traffic congestion is a factor when choosing a business location because it affects worker efficiency. Los Angeles, for example, has 10.8 hours of gridlock daily. Congestion is defined as enough traffic to reduce speeds below 60 mph on freeways and 35 mph on major streets.
| Most Traffic Congestion | Hours of Congested Travel Daily |
|---|---|
| Los Angeles | 10.8 |
| San Francisco-Oakland | 9.8 |
| Atlanta | 9.6 |
| Chicago-Northwestern Indiana | 9.6 |
| San Diego | 9.6 |
| Washington, D.C.-Maryland-Virginia | 9.6 |
| Seattle-Everett, Wash. | 9.4 |
| Boston | 9.1 |
| Denver | 9.1 |
| Miami-Hialeah, Fla. | 9.1 |
| Portland-Vancouver, Ore.-Wash. | 9.1 |
| Sacramento, Calif. | 8.9 |
| Phoenix | 8.6 |
| San Bernadino-Riverside, Calif. | 8.6 |
| San Jose, Calif. | 8.6 |
| Detroit | 8.4 |
| Minneapolis-St. Paul, Minn. | 8.4 |
| New York, N.Y.-Northeastern, N.J. | 8.4 |
| National Average | 7.9 |
| Source: Texas Transportation Institute | |
MULTIFAMILY CONSTRUCTION…
As developers continue to grapple with a soft apartment market, the number of units in the planning stages is declining, according to M/PF Research. During the 12 months ending in May 2002, building permits were issued for about 4% fewer apartment units nationwide than in the same period one year earlier. Meanwhile, the number of construction starts increased slightly. That's because the planning for those projects was well under way when the recession started.
| June 2000-May 2001 | June 2001-May 2002 | % Change | |
|---|---|---|---|
| Multifamily building permits | 334,600 units | 320,100 units | -4.3% |
| Multifamily construction starts | 288,000 units | 290,400 units | 0.8% |
| Source: M/PF Research calculations based on data from the U.S. Dept. of Commerce | |||
…AND WAREHOUSE RENTS
As the economy has slipped, so too has the national average for warehouse asking rents (triple-net). The average rate declined nearly 2.5% between the first and second quarters of last year, and has been decreasing ever since. The rate is calculated by Grubb & Ellis Co. and is based on information collected about warehouses 5,000 sq. ft. or larger that are located in the nation's 30 largest industrial markets.