"We were not surprised by the interest on the property mainly due to location and the fact that it is walking distance to major retailers and new development," Crotty says.

Avison Young Principals Crotty, Michael T. Fay, David Duckworth, Brian C. de la Fé, Emily Brais and Berkley Bloodworth closed the sale on behalf of the seller. Getzy Fellig and Sam Zalmanov manage AB.

"We continue to see stress in both the hospitality and retail industry and that being a theme carrying on throughout the year," Crotty said. "This property's location and its optionality was a great interest to buyers, especially as we continue to see hospitality and retail deals due to past distress."

While the hotel sector has been hit hard by the pandemic, valuations recently posted unexpected improvements, according to the Green Street Commercial Property Price Index.

Green Street's total price index increased by 1.1% in January, an uptick that reflects higher valuations for hotel properties and stagnation in other property sectors. 

Private equity and institutional investors have also started to return to the hotel market, a trend that began in the second half of 2020. According to research from JLL, private equity and institutional investors were responsible for 54% of total hotel transactions last year and are likely to remain active in the market this year, driving investment activity. 

Last year, private equity alone raised $24.5 billion in closed-end funds for hotel investment. This matched 2016 investment levels, and it will likely provide the majority of hospitality investment this year.