U.S. hotels are on the rebound, reports Moody’s Investors Service. Both full- and limited- service segments report strong growth revenue per available room (RevPAR) for the first quarter of 2004, according to the firm’s Red-Yellow-Green quarterly report on the underlying health of the commercial mortgage backed securities (CMBS).

The full-service hotel segment scored 68 out of 100 for full-service and the limited-service sector scored a 69 during the first quarter of 2004. By comparison, full-service hotels scored 53 and limited service hotels scored 55 in the fourth quarter of 2003.

"In the hotel sector overall, RevPAR is up by 8.4% year-over-year, and demand for new hotel rooms is expected to outpace supply by a strong 7.5%, because of strong demand and a shallow supply pipeline," says Sally Gordon, Moody’s analyst and author of the report.

Other property segments turned in a mixed performance. Shopping centers were the strongest single segment with a score of 83. Conversely, the weakest segment was suburban office buildings, which scored only 48. The central business district (CBD) and suburban office sectors are fighting an uphill battle against high vacancy. The CBD office score ebbed slightly from 58 at the end of 2003 to 57 at the close of the first quarter of 2004.

The multifamily score dropped from 80 in the fourth quarter of 2003 to 77 in the first quarter of 2004. Still, says Gordon, the apartment market retains a favorable outlook.

The composite industrial score increased slightly from 63 to 64 over the same period, continuing what Moody’s characterizes as "a slow but steady upward march." One positive sign is that the industrial supply pipeline of new construction was only 0.5% of existing inventory.

Property markets that scored the highest during the first quarter of 2004 are Orange County, Calif., Honolulu, Ventura County, Calif., and New York City. Markets that scored the lowest are Jacksonville, Fla., Pittsburgh, Austin and Stamford, Conn.