Even though the total hotel sales volume dropped by over 50% in the first quarter of this year from 2022’s fourth quarter, investors still found opportunities to invest in large transactions. Six hotel properties sold for over $100 million in the first three months of 2023. Two of the properties are currently closed and one was sold at auction. Here is a quick look at the transactions and the participants.
Hotel Name: Hilton Minneapolis
Market: Minneapolis
Buyer: Wells Fargo Bank
Seller: Walton Street Capital, LLC
Number of rooms: 826
Sales Price: $225 million or $272,397 per key
The Hilton Minneapolis was sold at auction by the Hennepin Sheriff’s Office to the sole bidder. The prior owners defaulted on the loan in mid-2020. Walton Street had purchased the property in 2016 from DiamondRock Hospitality for $143 million. The property remained open during the bankruptcy proceedings.
Hotel Name: New York Marriott East Side
Market: New York City
Buyer: Hawkins Way Capital
Seller: Deka Immobilien
Number of rooms: 655
Sales Price: $154 million or $235,115 per key
The landmark New York Marriott East Side opened in 1924 and closed early in the pandemic in 2020. The two prior purchase prices were $287 million in 2005 and $270 million in 2015. Just prior to the most recent sale, the management agreement with Marriott Hotel Services was terminated.
Hotel Name: Hilton Miami Airport
Market: Miami
Buyer: MCR Hotels
Seller: Park Hotels & Resorts
Number of rooms: 508
Sales Price: $118 million or $232,776 per key
Park Hotels and Resorts sold the Hilton Miami Airport, which it deemed a non-core asset. The gross capitalization rate on 2019 operating income was 6.2%, as confirmed by the seller. The corresponding mortgage on the property was $86 million. MCR also owns the Hyatt Place Miami Airport East, which is bought in December 2022 for $16.6 million.
Hotel Name: The Standard Hollywood
Market: Los Angeles
Buyer: Ed Scheetz
Seller: Randy Garitty
Number of rooms: 139
Sales Price: $112 million or $809,353 per key
Long-time hoteliers Ed Scheetz and Ian Shrager purchased The Standard Hollywood which closed during the pandemic and was put up for sale in 2021. The seller provided $86 million in financing. This is the highest price paid for a commercial property so far in 2023. The hotel was built in 1962 and awarded historic preservation status by the city of West Hollywood in April of 2022.
Hotel Name: The Camby, Autograph Collection
Market: Phoenix
Buyer: KHP Capital Partners
Seller: Host Hotels & Resorts Inc
Number of rooms: 277
Sales Price: $110 million or $397,112 per key
The former Ritz Carlton in Scottsdale was bought by Host Hotels and Resorts for $75 million in May of 1998. This time around Host provided $84 million in seller financing to KHP Capital.
Hotel Name: SIXTY SoHo
Market: New York City
Buyer: Standard International
Seller: Sixty Hotels LLC
Number of rooms: 97
Sales Price: $106.9 million or $1,102,062 per key
The 14-story SIXTY SoHo hotel opened in 2001. This is Standard’s third property in New York, after the 338-room Standard High Line and 142-room Standard East Village. Bangkok Bank provided a $65 million mortgage to the buyer.