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Commercial Construction Magazine - Board Talk
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Administrator at: 6/17/2010 |
ATLANTA, GA: June 1, 2010 - Eyeing the Rest of the Year
As the commercial construction industry continues to work itself through these trying economic times, we will ask our Editorial Advisory Board to lend their insight into the various trends, issues, and challenges impact all of us. Following is an edited version of their responses to our industry question.
AS WE HEAD INTO THE MIDDLE OF 2010, WHAT ARE YOUR THOUGHTS ON HOW BUSINESS WILL SHAKE OUR THE REST OF THE YEAR? HOW IS YOUR PLANNING GOING?
The hospitality construction sector is in a very challenging environment at this stage of 2010. The current
cycle and timing of the hotel development sector has effectively paused any new ground-up construction.
New loans for hotel development essentially ended in mid-2008, so construction loans on hotels that were approved prior to then permitted hotels to be built and finished by the end of 2009 and early 2010. Now that this timeframe has passed and construction on these hotels is completed, we are not seeing any new product coming out of the ground; The focus has shifted to repositioning of existing product through
renovations and rebranding.
We believe that there will continue to be limited, if any, development of new hotel projects through the
end of 2010. General Contractors will be positioned well to pursue renovation projects on a large-scale
basis for full-service hotels and refresh/rehabilitation basis for select and limited-service hotels. Virtually
all funding for these projects is private equity, so Owners and Asset Managers of hospitality assets will be
very keen on keeping renovation budgets to an absolute minimum.
Our internal focus has shifted from new development of hotel product to acquisition and renovation of
existing products in selective markets. 2010 will be a unique year that will afford opportunities to those
best positioned to take advantage of the current market, but also a challenging year for those that are
unwilling to recognize and adapt to the market conditions in our industry.
-PUNIT R. SHAH, President, Liberty Group of Companies
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