Routes to ROI: Financial Considerations Behind New Build and Conversion Options
🏨 In the current commercial real estate landscape, high interest rates and construction costs contribute to a slower transaction rate, with sellers hesitant due to lower-rate loans and cash-rich buyers waiting for the right deal. New construction costs may exceed $200,000 per key, with geopolitical factors and local labor wages impacting pricing. Extended-stay hotels gain popularity for their balance of lower operational costs and higher RevPAR. Conversions involve analyzing costs, brand alignment, and market opportunities, with aging properties potentially moving from brands like Marriott to Choice or Hilton to Wyndham to save costs.
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