In the most recent Lodging Econometrics construction pipeline report on New York City, the company found The Big Apple has a total of 169 projects consisting of 29,365 rooms in its construction pipeline, the largest pipeline of any market in the U.S. Of this total, the number of hotels under construction stands at 101 projects consisting of 17,108 rooms, while the number of projects scheduled to start construction in the next 12 months is 43 projects consisting of 6,384 rooms. The number of hotels in the early planning is at 25 projects consisting of 5,873 rooms. If all of the projects in the pipeline eventually come to fruition, this will increase the city’s guestroom supply 25.2 percent.
At this time, Lodging Econometrics expects New York to continue its current pace of growth. For the first half of the year, the city ranked third nationally for the number of new hotel projects added to its pipeline, with 24 projects consisting of 3,796 rooms added during this period.
The three market tracts with the largest hotel construction pipelines in New York are: Midtown South, the area between 24th and 36th Streets, with 36 projects (8,251 rooms); the Greater New York City Area, which includes Brooklyn, the Bronx and Staten Island, with 33 projects (2,956 rooms); and La Guardia/Queens North, which includes the area by the airport down to the Grand Central Parkway, with 27 projects (5,325 rooms). These three market tracts combined account for 57 percent of New York City’s total construction pipeline.
The market tracts with the most projects under construction are Midtown South with 24 projects (5,696 rooms); the Greater New York City Area with 16 projects (1,360 rooms); and JFK/Jamaica, which includes the area of Queens from the Grand Central Parkway south, the JFK Airport area and Jamaica, with 14 projects (1,930 rooms).
Lodging Econometrics’ forecast for new hotel openings predicts New York City will lead the nation for new hotel openings in 2018, with 45 projects representing 7,762 rooms. In 2019, New York is again forecast to top the list of new hotel openings with 52 projects representing 7,356 rooms.
Transaction activity, where sales data have been released into the public domain, has been relatively light for New York in 2018. There have been only eight hotels sold in the first half of the year: Three hotels sold to private equity groups, three to private hotel companies, one to Hilton Grand Vacations and one to an individual ownership and management group. The largest hotel sale was the 697-room W New York on Lexington Avenue, which was sold to Capstone Equities for $190 million, or roughly $272,490 per room. Since then, Capstone Equities has converted the hotel to a Tribute Hotel by Marriott International and changed its name to the Maxwell New York City.