United States -  Huntsville

Overview:

Installations such as Redstone Arsenal and George C. Marshall Space Flight Center, as well as Cummings Research Park, continue to form the bedrock of the local economy. In 2014, market occupancy began to recover and continued to rise through 2015, largely due to several major developments in the area. Boeing relocated into the first three completed buildings at the Redstone Gateway, a 468-acre master-planned development comprising 4.6 million square feet of Class-A office space, in 2013, while DRS Technologies signed a ten-year lease for its 131,600-square-foot facility in 2014. Additionally, firearms manufacturer Remington Outdoor Company opened its new $110-million, 900,000-square-foot production facility in 2015. Average rates in this market increased from 2003 through 2012; however, a drop in demand in 2013 prompted local operators to discount average rates slightly that year. Rate growth resumed in 2014, but remained relatively flat in 2015.

Given the relatively limited supply of hotels in the Huntsville market, only two confirmed hotel transactions have occurred since January 1, 2015. The more notable of the two sales is that of the Homewood Suites by Hilton in Downtown Huntsville, which sold for $14 million or $139.000 per key. The ongoing development of the Redstone Gateway and the recently announced $70-million CityCentre at Big Spring mixed-used community in Downtown Huntsville bode well for the long-term outlook of the local hotel market. While temporary controls in the form of new supply additions will likely limit RevPAR growth, we expect hotel values to begin to trend upward in 2016, with a notable increase anticipated for 2017.

* 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:

Huntsville United States
Previous Year +9% (3 of 71) +1% (49 of 71)
Growth in 2017 +11% (1 of 71) +2% (36 of 71)
Growth in next 3 years +16% (7 of 71) +10% (36 of 71)

Change In Value For Market:

Huntsville RevPAR % Change

For more information, please contact:

Michael Brophy
mbrophy@hvs.com
  • +1 678 628-6577 (w)
Benjamin Levin
blevin@hvs.com
  • +1 404 276-5862 (w)