Cincinnati is located on the southeastern Ohio border along the Ohio River. The metropolitan area encompasses a three-state region, including parts of Indiana and Kentucky. Top firms in Cincinnati represent key industries, such as aerospace, automotive, biotechnology, brand design, creative services, chemistry, financial services, IT services, and consumer goods. Together, these sectors have helped fortify the city’s economic position in recent years, allowing the city to be somewhat buffered from the major fluctuations that other cities experienced during the recession. The city has been successful at not only retaining area businesses, but also at attracting new establishments. The area’s low cost of living, aggressive development incentives, and excellent accessibility via multiple transportation routes have brought national recognition to the MSA. Furthermore, the greater Cincinnati area ranks in the top ten for the number of Fortune 500 and Fortune 1000 companies per million residents, which is a positive reflection of the region's strong economy and the city's high quality of living. In 2016, FC Cincinnati began its inaugural season in the United Soccer League. The team completed their first season having set records for single-game attendance, playoff game attendance, average attendance, and season ticket sales. In 2017, FC Cincinnati formally applied to be an expansion team in Major League Soccer; if accepted, they would join MLS for the 2020 season.
Downtown Cincinnati is experiencing record occupancy and average rate levels, bolstered by the strong commercial, convention, and tourism sectors downtown. The market area, which had relatively little new supply open in the five years prior, absorbed several new hotels from 2014 through 2016, including a Renaissance hotel in 2014, and a dual-branded Homewood Suites/Hampton by Hilton in 2015. In 2016, a Holiday Inn & Suites opened in Downtown Cincinnati, while the Hotel Covington opened in Downtown Covington, Kentucky, and a Hampton Inn & Suites opened in Newport, Kentucky. Additionally, an Aloft opened in Newport in early 2017. Furthermore, record occupancy and average rates have spurred new developments Downtown; an Autograph Collection, an AC by Marriott, and two boutique hotels are also proposed for Downtown Cincinnati. With the opening of these properties, the overall condition and quality of the guestroom product in the downtown market will improve, and almost every other property has been considerably renovated in recent years. Furthermore, the recently sold Garfield Suites Hotel was converted to apartments in November 2016. The change to supply will certainly affect occupancy levels in the CBD; however, the strength of the area’s commercial employers, new development occurring Downtown, and the city’s strong convention and tourism markets will prevent occupancy from falling significantly as the new supply comes online by 2018. These factors should contribute to modest gains in values in 2017, followed by relative stability in values through 2019.
Seven hotels totaling approximately $70 million in transaction volume have sold since January 2016, averaging just under $75,000 per room. However, we note that of the seven, the Hyatt Regency Cincinnati sold for an undisclosed sum during this period. Other notable transactions included The Cincinnatian Hotel (highest price per room $157,534) and the Embassy Suites Cincinnati River Center Covington (highest total price paid $34,074,524, or $150,108 per room).