United States -  Charlotte

Overview:

The Charlotte metropolitan area continues to benefit from a diversified economy, including a mix of demand from the banking, energy, and healthcare sectors. The area is also home to manufacturing, retail and wholesale trade, information, and an increasing number of international companies. Charlotte continues to be one of the fastest growing cities in the state and in the country, due in part to its high quality of life with a below-average cost of living. Major projects within the area include the ongoing renovation of the Bank of America Stadium, the 2014 opening of the BB&T Ballpark, and the 2015 renovation of Bojangles’ Coliseum. The passing of controversial House Bill 2 in early 2016 has reportedly somewhat affected hotel demand in larger cities throughout the state, primarily in the group segment where event organizers have canceled events in response to the bill. While it is unsure what the future holds for the bill, it will likely temper lodging metrics in the near term.

Recent new supply additions include the Hilton Garden Inn near the airport and the Hyatt Place Uptown, both of which opened in late 2013, and the Homewood Suites by Hilton, which opened in the neighborhood of Ballantyne in 2014. While no new supply opened in Charlotte in 2015, investors are still being drawn to the market, with five projects currently under construction as of early 2016; development is largely centered in the Uptown, Airport, and SouthPark areas of the city. As demand and average rate have improved throughout the market, many hoteliers are opting to invest in renovations to their properties rather than selling them at this time. The area benefited from the 2012 Democratic National Convention, which not only resulted in a total economic impact of over $163 million but also brought national exposure to the Charlotte market. The market should continue to capitalize on this exposure and continue to realize modest demand gains in the future.

Thirteen hotel sales have been recorded since June 2014. Five of the sales were in excess of $20 million in price. In 2014, the DoubleTree Suites by Hilton Charlotte SouthPark sold for $37,000,000 ($177,885 per key), the Residence Inn by Marriott Charlotte SouthPark sold for $22,284,000 ($146,605 per key), and the Hyatt House Charlotte Center City sold for $32,496,000 ($199,362 on an allocated-per-key basis). In 2015, the Crowne Plaza Charlotte Executive Park sold for $22,500,000 ($75,758 per key) and the Embassy Suites by Hilton Charlotte sold for $32,000,000 ($116,788 per key). Values should continue to increase in the next two years, although the pace will be somewhat tempered by the growth of new supply; however, Charlotte continues to expand and attract new business and residents, making it a popular option for investors active in the Southeast.

* 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:

Charlotte United States
Previous Year +8% (5 of 71) +1% (49 of 71)
Growth in 2017 +3% (9 of 71) +2% (36 of 71)
Growth in next 4 years +13% (27 of 71) +12% (32 of 71)

Change In Value For Market:

Charlotte RevPar % Change

For more information, please contact:

Janet Snyder
jsnyder@hvs.com
  • +1 972 978-4714 (w)
Patricia Shih
pshih@hvs.com
  • +1 404 791-5509 (w)
Mike Bendert
mbendert@hvs.com
  • +1 248 953-7894 (w)