Weekly Hotel Property Sales Report: August 19-25, 2023
The hospitality industry is continually evolving, and recent transactions provide valuable insights into the state of the hotel property market. As of the week ending August 25th, 2023, the market boasted an impressive 249 properties comprising approximately 20,000 rooms currently under contract. Here's a closer look at the notable closings and their implications:
Closures and Prices:
CoStar reported that 15 properties with a combined room count of 1,150 changed hands during the week in question. This underscores the ongoing activity in the industry. Additionally, CoStar confirmed the transaction prices for five properties, totaling 216 rooms, which amounted to $15.5 million. However, for the remaining ten properties encompassing 1,010 rooms, our estimates suggest a substantial market value of approximately $216.6 million.
Standout Sales:
Among the recent transactions, several properties captured our attention due to the noticeable overlap with our strongest buyers:
Super 8 by Wyndham Washington: This 48-room hotel located in the Peoria, Illinois area, was sold for $1.4 million or $29,167 per key.
La Quinta Inn by Wyndham Eagle Pass: Situated on the Mexican border in Eagle Pass, Texas, this 131-room hotel fetched an impressive $8.2 million, translating to $62,595 per key.
Econo Lodge Myrtle Beach: With 33 rooms, this Myrtle Beach, South Carolina hotel is estimated to have been sold for $3.2 million or $96,970 per key. Although the transaction price is not confirmed, it's notable that the initial asking price was $3.5 million.
Kauai Beach Resort, Lihue, Hawaii: The largest transaction of the week involved the 350-room upper-upscale Kauai Beach Resort. While the confirmed transaction price remains undisclosed, the buyer, Outrigger Resorts, intends to invest an additional $60 million in the property. Based on this investment, we estimate a price of $360,000 per room, totaling approximately $122.5 million. It's important to mention that some of these rooms were previously advertised as "condos," potentially affecting room counts on other websites.
The recent hotel property transactions provide a comprehensive view of the current market dynamics. The variety of properties, pricing flexibility, and strategic investments like the Kauai Beach Resort's renovation project underscores the resilience and adaptability of the hospitality industry. As the market continues to evolve, it will be essential to monitor these trends closely for informed decision-making in the real estate sector.
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