The recent sale of the Charter Seattle, a hotel under Hilton’s upscale Curio brand, was the second hospitality deal in less than a week to land near pre-pandemic prices in the city, highlighting investor optimism in the return of travelers to the urban core.
An entity affiliated with Dynamic City Capital, of Provo, Utah, purchased the 229-room Charter at 1610 Second Ave. in the city’s central business district for $107.8 million, or about $471,000 per key, on Oct. 24, according to sales documents. The seller was the property’s developer, Widewaters Hotels of Syracuse, New York.
The deal came on the heels of the Oct. 19 sale of the Pan Pacific Hotel at 2125 Terry Ave., also downtown, for $70 million, or about $457,000 per room for the 153-room property, according to sales documents. The buyer was KHP Capital Partners of San Francisco and the seller was Hersha Hospitality Trust of Harrisburg, Pennsylvania, according to CoStar data.
The deals cap a relatively quiet period for hospitality sales in the central part of the city, which totaled only $175 million in the 24 months preceding the first of the two deals, according to CoStar data, compared with $389 million in the 2017-2019 period immediately before the pandemic.
The prices achieved on both deals also mark another step toward recovery for the city’s hospitality sector, with per-key values approaching pre-pandemic levels.
The 24 months preceding the deals saw per-key prices standing at a meager $334,000 for comparable properties in the city center, dragged down by the sale of the Arctic Club, a Hilton Doubletree property that local media reported was sold in a pandemic-induced foreclosure.
The pair of October deals landed nearly dead on the average for comparable city-center properties in the two years leading up to the pandemic, which stood at about $469,000 per room, according to CoStar data.
The age of both properties likely helped drive their prices upward — the Pan Pacific was built in 2006, the Charter in 2018 — but analysts and brokerages have widely described the city’s hospitality market as on a path to recovery.
A June CBRE report predicted the city’s hotel sector would see a full recovery of revenue per available room by 2024, while a third-quarter report from brokerage Kidder Mathews said hotel occupancy in the city’s central business district had hit 78.4%, up from 55.5% at the same time in 2021 and 12.2% in 2020.
Both October sales included significant deductions for personal property — usually furnishings, equipment and furniture in hotel sales — and thus had significantly lower net sale prices.
For the Charter Seattle, a deduction of $24.7 million yielded a net price of $83.1 million. The Pan Pacific sale likewise included an $18.7 million deduction for a net sale price of $51.3 million.
Neither Dynamic City Capital nor Widewaters immediately responded to a request for comment from CoStar News.