The shadow Manhattan has cast on Brooklyn for years has undoubtedly lifted. And that's before you get to its hotel market.
According to a report from realty service Massey Knakal, and as reported by Real Estate Weekly, through the first half of 2014, Brooklyn’s hotel market is exhibiting very strong performance as growth in supply surges.
According to the report, ADR in the borough has increased to record levels and occupancy remains well above the national average.
Even more striking is that visitors to New York are avoiding Manhattan hotels altogether in favor of Brooklyn properties. This has investors and developers excited over the market's future prospects. And it's manifesting itself in a wave of new supply—over all segments of the industry.
And as prices in Manhattan climb to new record highs, "alternative markets, like Brooklyn, offering slightly better yield with strong underlying fundamentals, are providing yield-oriented investors with a desirable alternative without straying too far from the security of New York’s core hospitality market."
In total, there are reportedly 27 hotels in the development pipeline, accounting for 2,378 rooms versus the 2,129 rooms in last year’s hotel pipeline—an 11.6-percent uptick.
Demand in Brooklyn has been on the rise year-over-year for the last several months ending in July, according to the most recently available data from STR. The same has been the case for the occupancy rate, average daily rate, revenue per available room (RevPAR), supply, demand and revenue.