The U.S. resort trade noticed 800 transactions within the first quarter of 2024, in accordance with knowledge from CoStar. Larger 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 taking a look at disclosed greenback quantity, transactions had been at $3.4 billion.
made up 20 p.c of the quarterly transaction exercise. Probably 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 best sale value for Q1 2024) and $1.43 million per key (the best value per key for Q1 2024).
Different notable gross sales included the Wyndham Boston Beacon Hill to RLJ Lodging Belief, which represented all the Q1 gross sales quantity available in the market (second highest by gross sales value at $125 million), and the AC Resort Washington DC Conference Heart for $116.8 million to Apple REIT, which represented 70 p.c of Q1 transaction exercise available in the market. That deal included FF&E valued at almost $10 million and was the third-highest sale in america throughout 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 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) had been the one markets to see double-digit transactions. Of the $102 million transaction quantity in Atlanta, 70 p.c got here from eight Marriott and Hilton middle-tier class resorts, with sale costs starting from $15 million-$21 million. Denver adopted the same development, with 66 p.c of the $82 million in Q1 quantity from 4 middle-tier resorts.
In Los Angeles, resort transaction quantity has declined almost 75 p.c. Since April 2023, when the “Mansion Tax” took impact, solely 4 resorts have traded available in the market with value factors above $20 million, two of which had been tax exempt. As well as, greater 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 Seashore for $68 million represented over 80 p.c 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 p.c, making this the second-highest occupancy vacation spot within the state.
Excluding the Ritz-Carlton Key Biscayne, Miami, many of the highest price-per-key transactions had been small resorts within the decrease and middle-class tiers inside high-leisure locations. Future makes use of and transaction varieties had been throughout the board, with some resorts being slated for conversion or funding purchases. These offers consisted of principally non-public 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.
