After failing earlier this year to sell its entire portfolio of 15 U.S. hotels, Toronto-based Skyline Investments now has eight under contract for sale with the deals expected to close in the third quarter.
Skyline has signed agreements with multiple buyers to sell eight of its 13 select-service Courtyard hotels in nine states, according to a regulatory filing in Israel, where the company is required to file public disclosures to Israeli bondholders. The hotels are managed by Aimbridge Hospitality under the Courtyard by Marriott brand.
The effort to sell the properties comes amid reduced hotel acquisitions in the United States. Last year, only $29.6 billion of hotels changed hands, less than half of the total transaction value of the prior year, according to CoStar data.
The $3.2 billion in first-quarter 2024 sales was the second-lowest total since the financial crisis of 2008-2009, according to CoStar data. Only the second quarter of 2020, when COVID-19 spread into a global pandemic, was lower. Overall transaction activity has been muted by high borrowing costs and disagreements in pricing between buyers and sellers.
Skyline’s contracts reflect the lack of buyer interest in hotels. At a contracted combined purchase price of $91.75 million, the total price is coming in at $13 million less than Skyline’s carry value, the company reported.
The Courtyards under contract to be sold are: Chicago Arlington Heights, Chicago Deerfield and Chicago Rockford in Illinois; Birmingham Hoover and Huntsville University Drive in Alabama; Fort Myers Cape Coral in Florida; Manassas Battlefield Park in Virginia; and Lexington North in Kentucky.
The signed agreements are binding on the purchasers, but the company has the option not to complete the agreements under certain circumstances, Skyline said.
In its filing, Skyline added it is pursuing the sales of its two hotels in Cleveland: the Renaissance Cleveland Hotel and Hyatt Regency Cleveland at the Arcade.
Skyline has been trying to sell the two hotels since the summer of 2022.