Sheraton Hotel Redding At Sundial Bridge - Redding Record ...

Conclusion
frontage is back to normal levels. Several operators interviewed indicated that
2010 summer occupancy levels increased, citing the improved rainfall condition.
This section discussed a wide variety of economic indicators for the pertinent
market area. Based on our research of the proposed subject property’s market
area, we are able to conclude that the Redding, CA MSA continues to represent a
diverse economy, supported by the area’s tourist and leisure attractions, its
location midway between Seattle and Los Angeles on Interstate 5, and its position
as a regional medical center. Hotel operators reported an increase in
accommodated room nights in 2010, especially room-night generation from sport
groups from the Big League Dreams. However, Redding’s economy is expected to
be challenged in the near term. Residential foreclosure rates remain high, income
levels continue to slide, and commercial properties are becoming more vulnerable.
An estimated one million square feet of retail and commercial space is reportedly
vacant and commercial rents are less than half compared to those during the peak
of 2007 and 2008. The monthly unemployment rate rose in December 2010
compared to the same period in 2009, albeit at a more moderate rate. The outlook
for the area is cautiously optimistic. Although the local economic indicators are
still declining, visitation is improving. Overall recovery in the area is expected over
the long term.
Our analysis of the outlook for this specific market also considers the broader
context of the national economy. The U.S. economy entered a recession in
December of 2007, initially triggered by the subprime mortgage crisis that led to
the collapse of the housing bubble. The recession worsened in the fall of 2008
when the financial crisis shocked the world economy. The U.S. fell into economic
decline for most of 2009, but some positive trends began to emerge mid-year. The
nation’s gross domestic product and corporate profits began to grow again in the
third quarter of 2009. Momentum continued to build during 2010. Stock prices
and retail sales increased across the country, and real GDP in the U.S. expanded by
an annual rate of 3.2% in the fourth quarter of 2010, accelerating from the 2.6%
rate noted in the third quarter. The prospects for continued economic growth are
tied to the expansion of the labor market. While many employment sectors,
including manufacturing, are reporting improving trends, unemployment remains
heightened. The construction and housing sectors continue to be challenged.
Nevertheless, in January of 2011, the Federal Reserve reported that businesses
were positive, although still generally cautious, about the outlook for 2011. Both
political parties have made the reduction of unemployment a top priority and, at
this point, expectations are for slow to moderate growth in the near term, with the
potential for a period of stronger growth as the economic recovery accelerates.
February-2011 Market Area Analysis
Sheraton Hotel Redding At Sundial Bridge – Redding, California 45