The U.S. resort trade noticed 800 transactions within the first quarter of 2024, in line with knowledge from CoStar. Increased rates of interest proceed to take a toll on transactions, with the estimated undisclosed greenback quantity at roughly $4 billion—the bottom for a primary quarter since 2010. When disclosed greenback quantity, transactions have been at $3.4 billion.
made up 20 % of the quarterly transaction exercise. Essentially the most notable deal was the sale of two thirds of the possession of the 423-room Ritz-Carlton Key Biscayne, Miami, from Brookfield Resort Properties to Gencom. That deal closed at $400 million (the very best sale value for Q1 2024) and $1.43 million per key (the very best value per key for Q1 2024).
Different notable gross sales included the Wyndham Boston Beacon Hill to RLJ Lodging Belief, which represented the complete Q1 gross sales quantity available in the market (second highest by gross sales value at $125 million), and the AC Resort Washington DC Conference Middle for $116.8 million to Apple REIT, which represented 70 % of Q1 transaction exercise available in the market. That deal included FF&E valued at practically $10 million and was the third-highest sale in the USA through the quarter.
New York Metropolis, which ranked second in Q1 resort gross sales quantity, noticed eight resort offers shut, producing $236 million. The East River-Queens/Brooklyn West space had the very best gross sales quantity available in the market, with three resort gross sales accounting for a mixed $94 million. One of many three was the Trademark Assortment by Wyndham Brooklyn, which was traded in a chapter public sale for $34.9 million.
Atlanta (13 transactions) and Denver (10 transactions) have been the one markets to see double-digit transactions. Of the $102 million transaction quantity in Atlanta, 70 % got here from eight Marriott and Hilton middle-tier class lodges, with sale costs starting from $15 million-$21 million. Denver adopted an identical pattern, with 66 % of the $82 million in Q1 quantity from 4 middle-tier lodges.
In Los Angeles, resort transaction quantity has declined practically 75 %. Since April 2023, when the “Mansion Tax” took impact, solely 4 lodges have traded available in the market with value factors above $20 million, two of which have been tax exempt. As well as, larger rates of interest, resort union labor strikes, and laws impacting Los Angeles resort values have dampened high-priced transaction exercise.
Throughout Q1, the sale of the 176-room Residence Inn Los Angeles LAX Manhattan Seaside for $68 million represented over 80 % of first-quarter gross sales quantity available in the market. The 12-month common resort occupancy for the Los Angeles Airport space is close to 80 %, making this the second-highest occupancy vacation spot within the state.
Excluding the Ritz-Carlton Key Biscayne, Miami, a lot of the highest price-per-key transactions have been small lodges within the decrease and middle-class tiers inside high-leisure locations. Future makes use of and transaction varieties have been throughout the board, with some lodges being slated for conversion or funding purchases. These offers consisted of largely personal consumers and REITs.
Regardless of a sluggish begin to 2024, brokers, lenders, and homeowners have expressed their decidedly optimistic outlook for the rest of the yr.
