United States -  Stamford - Danbury

Overview:

Fairfield County’s location in southwestern Connecticut, less than 60 minutes from Midtown Manhattan by commuter rail or interstate highway, has contributed to many corporations to relocate their headquarter or regional operations from New York City, transforming the region into one of the largest concentrations of corporations in the nation. Today, Fairfield County is home to numerous major corporations and Fortune 500 companies, including General Electric, Xerox, Praxair, Charter Communications, Priceline Group, Terex, W.R. Berkley, EMCOR Group, Starwood Hotels & Resorts, United Rentals, and Harman International Industries.
 
Prior to the financial crisis, RBS and UBS established major presences and trading floors in Stamford. However, both financial institutions have downsized their local operations in recent years amid higher regulations and tougher revenue environments for trading and lending. In addition to decreased presence of RBS and UBS, General Electric announced in January 2016 that it plans to relocate the company’s headquarters to Boston, Massachusetts, and Marriott International announced in April 2016 that it would acquire Starwood Hotels & Resorts. As part of the merger, the combined headquarters operation will be consolidated at Marriott's corporate headquarters in Bethesda, Maryland, and the Stamford corporate headquarters will close.
 
New supply additions have been limited since 2010, and much of the investment in hotels has been in the form of refurbishment. The 86-unit J House opened in Greenwich in 2012, the 96-unit Hotel Zero Degrees opened in Norwalk in 2013, and the 117-unit independent Milford Lodge was converted to a 94-unit Holiday Inn Express Hotel & Suites in Milford in 2014. Other recent conversions have included the 127-unit Four Points by Sheraton to a 129-unit EVEN Hotel in Norwalk, and the 441-unit Stamford Plaza Hotel & Conference Center to a 355-unit Crowne Plaza and a 100-unit Holiday Inn Express Hotel & Suites. A 126-unit Residence Inn by Marriott is currently under construction and is expected to open in Stamford mid-year 2016.
 
Hotel transaction activity in Fairfield County has been limited during the last three years. Only six transactions, totaling $90,450,000, were recorded during this period, with each occurring in 2014. Ranging from $68,000 per key to $122,000 per key, hotel transactions represented limited- and select-service properties. The two largest sales in 2014 were the Hilton Garden Inn in Norwalk and the Homewood Suites by Hilton in Stratford. The 170-unit Hilton Garden Inn sold for $28,650,000 ($168,529 per key) in November, while the 135-unit Homewood Suites by Hilton sold for $16,500,000 ($122,222 per key) in March.
 
The outlook for the Fairfield County market remains positive, despite cutbacks in the finance industry and the departure of General Electric and Starwood Hotels & Resorts Worldwide. Market-wide occupancy is forecast to remain relatively stable over the next few years, while average rate is anticipated to increase moderately. Hotels should register multiple years of low-to-mid single-digit RevPAR growth and realize moderate increases in value.
 
* 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:

Stamford - Danbury United States
Previous Year +2% (29 of 71) +1% (49 of 71)
Growth in 2017 +3% (14 of 71) +2% (36 of 71)
Growth in next 3 years +16% (6 of 71) +10% (36 of 71)

Change In Value For Market:

Stamford - Danbury RevPar % Change

For more information, please contact:

Preston Puleo, MAI
ppuleo@hvs.com
  • +1 910 723-3579 (w)
Erich Baum, CRE
EBaum@hvs.com
  • +1 603 502-6625 (m)
Brian Bisema
bbisema@hvs.com
  • +1 781 454-8930 (w)