United States -  Charleston

Overview:

Tourism is the cornerstone for the greater Charleston area, with healthcare/medicine, education, military, and manufacturing also serving important roles. The Medical University of South Carolina (MUSC) opened in 1824 and was one of the first medical schools to open in the United States. In 2005, the MUSC Medical Center announced a 20-year expansion plan. The entrance of Boeing in 2009 has positively affected the market, including its new IT Center of Excellence and an Engineering Design Center in North Charleston. In addition, Clemson University opened a $98-million, wind-turbine testing facility in North Charleston in late 2012. In November 2013, the world's largest wind-turbine drive-train testing facility and smart grid simulator officially launched at The Energy Systems Innovation Center. Additionally, Volvo broke ground on a $500-million facility in Berkeley County in August 2015, and Daimler AG announced a $500-million expansion to its plant in North Charleston, including a new body shop, paint shop, and assembly line for its Mercedes-Benz division. Furthermore, significant plans are in place to expand the Port of Charleston in order to accommodate demand generated by the 2014 Panama Canal expansion.

In the second half of 2015, three new hotels opened in Downtown Charleston: The Spectator Hotel; the Grand Bohemian Charleston, Autograph Collection; and the dual-branded Hyatt House/Hyatt Place. In the city’s well-known Marion Square, one of the most anticipated new hotels is currently under construction; the proposed Marion Square Hotel will occupy the space that was formerly home to the old Charleston County Library. Several hundred new hotel rooms were added last year. In 2013, a temporary ban was placed on new construction of hotels consisting of 50 guestrooms or more; however, this ban was temporarily suspended in lieu of a three-month study of the lodging industry and the impact of new hotel development, particularly on the city’s historic district. Several developers have projects already under construction or in the planning stages that are larger than 50 rooms, including the Dewberry Hotel and Tribute, although there are a number of smaller properties in the planning stages, as well. As of May 2016, the City has confirmed plans for eleven new properties that would add more than 700 rooms to the market, which have already been approved. Despite high-barriers to entry, a notable number of hotels are proposed for Downtown Charleston; therefore, we anticipate new supply to outpace demand in 2017, with average daily rates continuing to increase. In addition to Downtown Charleston, Mount Pleasant and North Charleston continue to realize an influx of new supply. Furthermore, Summerville has also become an extremely desirable location for hotel development given the May 2015 announcement that Berkeley County will be home to Volvo’s first American plant.

While hotel transactions on the peninsula have been limited n the last three years, there have been a number of transactions in North Charleston. The sale of the DoubleTree by Hilton Guest Suites Charleston was the largest transaction noted for Downtown Charleston in 2015, at a reported sales price of over $600,000 per key.

* The HVI is an index, a statistical concept reflecting a measure of the difference in the magnitude of a group of related variables compared with a base period. As such, it is a measure of broad market trends, rather than a conclusion as to the specific value of any asset, and cannot be applied to an individual asset. A good comparison is the Consumer Price Index. While this index provides a reliable measure of the overall rate of inflation in a region, it does not indicate how the price of milk has changed at your grocery store. So how can the HVI be of use to an individual investor? Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent big picture data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Valuation Trends and Predictions:

Charleston United States
Previous Year +1% (47 of 71) +1% (49 of 71)
Growth in 2017 +2% (30 of 71) +2% (36 of 71)
Growth in next 3 years +12% (19 of 71) +10% (36 of 71)

Change In Value For Market:

Charleston RevPAR % Change

For more information, please contact:

Heidi Nielsen
hnielsen@hvs.com
  • +1 843 847-1986 (w)