After failing to secure a deal with a buyer for its U.S. hotels, Canada’s Skyline Investments is considering alternatives, including selling portions of its holdings in separate packages.
The Toronto-based company, the owner of 15 U.S. hotels, said in September that it was negotiating with an unidentified buyer for the sale of those holdings. In filings this week in both Canada and Israel, where its securities are publicly traded, the company said those negotiations failed to result in a binding agreement.
Those negotiations came at a time of reduced hotel acquisitions in the United States. Last year, only $23 billion of hotel assets changed hands, around half of the total transaction value of the prior year, according to CoStar data. Overall transaction activity was muted by higher borrowing costs and disagreements in pricing between buyers and sellers.
“For 2024, the expectation is that hotel transaction volume will increase," according to Jan Freitag, CoStar’s national director of hospitality analytics. “The Fed has signaled that interest rates may have peaked, which could give buyers conviction to start underwriting hotel asset deals in earnest again.”
In announcing that it failed to reach a deal for its entire U.S. portfolio, Skyline disclosed that it is now considering the possibility of selling all or some of its Courtyard by Marriott hotels to other buyers. Skyline owns 13 Courtyard hotels in the United States.
In addition, Skyline said it was continuing negotiations and discussions with the same potential buyer that it was negotiating with last fall and winter involving the sale potential sale of its two hotels in Cleveland: the Renaissance Cleveland Hotel and Hyatt Regency Cleveland at The Arcade.
Skyline has tried before to sell the two Cleveland hotels as part of a package deal. The latest one fell through in the summer of 2022.
About a year later, Skyline secured refinancing for the 293-room Hyatt Regency Cleveland at The Arcade. The $25 million financing replaced a previous $15.8 million loan.