What top US transactions for 2023 could mean for 2024

NATIONAL REPORT — Blackstone Real Estate Income Trust (BREIT), selling a 21.9% stake in The Bellagio in Las Vegas for $950 million, was the top U.S. hotel transaction by price in 2023, according to year-end data provided by CoStar.

BREIT cashed in some of its chips on the 4,000-key MGM Resorts to REIT Realty Income, which put a $5.1 billion valuation on the property. BREIT kept a 73.1% indirect interest in the property, and operator MGM Resorts International will keep a 5% stake. Blackstone bought Bellagio from MGM Resorts for $4.25 billion in 2019.

The top transaction on a per-key basis happened in December 2023, with RH Guesthouse in New York City’s Meatpacking District selling for $57.7 million. RH, formerly Restoration Hardware, bought the property from Delshah Capital. Since the property only has 10 rooms, it led the top 2023 transactions at $5,771,100 per key. RH has been operating the property since 2017 and has a 15-year lease.

Resurgence of NYC market

Jan Freitag, national director of hospitality analytics at CoStar Group, said the sale of New York City properties such as the Park Lane Hotel to the Qatar Investment Authority for $622 million and a portion of the Mandarin Oriental New York to Reliance Industries for $215 million pointed at a healthy transaction market in city. “The high number of transactions across NYC in 2023 was no surprise given the rate of recovery post-pandemic and continued ADR growth in the market,” he said.

Freitag said the biggest transaction of 2024 so far — Blackstone selling the Arizona Biltmore for over $1 million per key to London-based Henderson Park — is a positive sign for the 2024 market as well.

“That transaction points at the continued strong interest of international buyers for hotel assets, especially at the luxury end,” Freitag said. “We anticipate that the expected interest cut from the Fed will unleash further trading activity. However, we assume that the often commented on ‘wall of distress’ will, once again, not materialize this year.”

Here is a list of the top property transactions 2023 by sales price and per key provided by CoStar.

TOP 2023 U.S. HOTEL TRANSACTIONS (TOTAL PRICE)

1. The Bellagio (Las Vegas), 3933 rooms, $950,000,000 ($1,102,949 price per key), Buyer: Realty Income Corporation
2. The Diplomat Beach Resort, Curio Collection (Hollywood, Florida), 1,000 rooms, $835,000,000 ($835,000 per key), Buyers: Trinity Investments and Credit Suisse Asset Management                 
3. JW Marriott San Antonio Hill Country Resort (San Antonio, Texas), 1,002 rooms, $800,000,000 ($798,403 per key), Buyer: Ryman Hospitality Properties 
4. Park Lane Hotel (New York City), 610 rooms, $622,897,705 ($10,21,144 per key), Buyer: Qatar Investment Authority                
5. Hilton Boston Park Plaza (Boston), 1060 rooms, $370,000,000 ($349,057 per key), Buyer: Parks Hospitality    
6. Mandarin Oriental (New York City), 244 rooms, $215,330,000 ($1,176,667 per key), BuyerL Reliance Industries Limited
7. Rocky Gap Casino Resort, BW Premier (Flintstone, Maryland), 198 rooms, $203,900,000 ($1,029,798 per key), Buyer: VICI Properties Inc.
8. Motto by Hilton New York City Times Square (New York City), 400 rooms, $170,000,000 ($425,000 per key), Buyer: Magna Hospitality
9. Hampton Inn by Hilton New York Times Square (New York City), no room info available, $166,374,088, Buyer: Dauntless Capital Partners
10. Sonesta Nautilus Miami Beach (Miami) 250 rooms, $165,400,000 ($661,600 per key), Buyer: Service Properties Trust
    
    

    The RH Guesthouse in New York City sold for $57.7 million or $5.77 million per key.

TOP 2023 U.S. HOTEL TRANSACTIONS (PRICE PER KEY)

1. RH Guesthouse (New York City), 10 rooms, $57,711,000 ($5,771,100 per key), Buyer: RH (formerly Restoration Hardware)
2. The Mercer Hotel (New York City), 74 rooms, $49,383,713 ($2,669,390 per key), Buyer: BD Hotels                       
3. Farmhouse Inn (Forestville, California), 25 rooms, $32,000,000 ($12,80,000 per key), Buyers: Foley Entertainment Group LLC | Joseph Bartolomei                         
4. The Inn at Rancho Santa Fe (San Diego), 80 keys, $100,000,000 ($1,250,000 per key) Buyer: GEM Realty Capital, Inc.                            
5. Westgate South Beach Oceanfront Resort (Miami), 60 rooms, $73,000,000 ($1,216,667 per key), Buyer: 13th Floor Investments | Opera                      
6. Mandarin Oriental (New York City), 244 rooms, $21,5330,000 ($1,176,667 per key) Buyer: Reliance Industries Limited
7. The Bellagio (Las Vegas), 3,933 rooms, $950,000,000 ($1,102,949 per key), Buyer: Realty Income Corporation
8. SIXTY SoHo (New York City), 97 rooms, $106,900,000 ($1,102,062 per key), Buyer: Standard International
9. La Serena Villas, A Kirkwood Collection Hotel (Palm Springs, California), 18 rooms, $19,100,000 ($1,061,111 per key), Buyer: Kirkwood Collection                
10. Rocky Gap Casino Resort, BW Premier (Flintstone, Maryland), 198 rooms, $203,900,000 ($1,029,798 per key), Buyer: VICI Properties Inc.