In addition, the study reveals that new supply decreased to 3.2%for the first half of the year, down from 4.2% in 1999. The firmnotes that project postponements and cancellations are acceleratingand that the continued limitations in funding are playing a majorpart in restricting construction for all but the most experienceddevelopers.
While the current quarter-over-quarter decrease in activity isthe largest since Q4 1998, the trend actually began in Q3 of thatyear, with the Asian financial crisis and the abrupt withdrawal ofWall Street money. The trend is having a beneficial effect onindustry performance. Occupancies increased in the first half overthe previous year by one percentage point, and RevPAR increasesreached the highest levels seen in three years.
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John Salustri
John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.
