Noteworthy Q2 2022 observations include:

Thirty-eight trades or roughly 29 percent of the national quarter total occurred in the State of California, followed by twenty-nine trades or 22 percent of the national quarter in Florida. Combined, sixty-seven trades or 50 percent of the national quarter occurred in California and Florida.

Twelve trades or nearly 10 percent of the national quarter total occurred in the State of Georgia nine of which were in the Atlanta Metropolitan Area and the remaining three in the Savannah Metropolitan Area.

Two Q2 2022 sales were consummated for more than $200 million each.

The 553-unit Naples Grande Beach Resort was purchased by UK-based Henderson Park Capital Partners from Northwood Investors LLC for a total of $248 million, or $448,000 per key. Northwood Investors LLC purchased the property in 2013 for $149 million or 50 percent less than the current trade.

Sunstone Hotel Investors, Inc. (NYSE: SHO) acquired from Hyatt Hotels Corporation the 339-room The Confidante Miami Beach for $232 million, or $684,000 per key. SHO will invest approximately $60 million to reposition the beachfront resort under Hyatt's Andaz brand.

Nine Q2 2022 sales were consummated for between $100 million and $199 million each.

Parkwest Casinos purchased the 99 room Bicycle Hotel & Casino in Bell Gardens, CA for $102 million, or just over one million dollars per unit. A separate entity, related to the buyer acquired the gambling business for an undisclosed amount. The Bicycle Casino is a poker cardroom that offers a selection of card games with a wide range of limits.

The 120 key Wequassett Resort and Golf Club in Harwich, MA on Cape Cod was acquired by EOS Investors LLC for $105 million, or $850,000 per unit.

A joint venture between Oxford Capital Group, LLC & Goldman Sachs sold the 220 room Godfrey Hotel Hollywood in Los Angeles, CA for $115 million or roughly $523,000 per unit to an affiliate of The Related Companies. Oxford Capital Group, LLC maintains a minor ownership interest in the property.

Hyatt Hotels Corporation (NYSE: H) sold to Woodbine Development Corporation the 189 room Driskill Hotel in Austin, TX for $125 million or $661,000 per unit. H will continue to manage the facility under a long-term management agreement.

A joint venture between Trinity Real Estate Investments LLC and Oaktree Capital Management, L.P. acquired from Hyatt Hotels Corporation (NYSE: H) the 530-key Hyatt Regency Indian Wells Resort & Spa in Indian Wells, CA for $135.725 million or $256,000 per unit. The buyer intends to undertake a multi-million-dollar capital improvement plan to reposition the resort, and H will continue to manage the facility under a long-term management agreement.

Pebblebrook Hotel Trust (NYSE: PEB) acquired the 119-room Inn on Fifth in Naples, FL for $156 million or just over $1.3 million per unit.

A venture led by Avi Philipson invested $157 million or $858,000 per key to acquire the debt and an equity stake in the 183 room William Vale hotel in Brooklyn, NY. The transaction included acquisition of debt and a 50 percent equity stake in the property.

Upon the recent completion of construction of the 234 room Conrad Nashville, a joint venture between Propst Development and Chartwell Hospitality sold the property to Northwood Investors for $170 million or $727,000 per key.

Pebblebrook Hotel Trust (NYSE: PEB) acquired from Square Mile Capital and Metrovest, the 257 room Gurney's Newport Resort & Marina in Newport, Rhode Island for $174 million, or $677,000 per unit. PEB has the right to purchase the marina (which includes 22 slips accommodating boats up to 240 feet) in 2027.

Institutional investment platforms, many of whom are lodging centric, dominated the Q2 2022 hotel transaction arena.

Examples of buyers include: Apollo Global Management, Barings Real Estate Advisers, DiamondRock Hospitality Company, Electra America Hospitality Group, EOS Investors LLC, Henderson Park Capital Partners, Highgate, KSL Capital Partners, Mission Hill Hospitality, Noble Investment Group, Northwood Investors, Oaktree Capital Management, L.P., Opterra Capital, Pebblebrook Hotel Trust, Reuben Brothers, Rockbridge, Stockdale Capital Partners, Stonebridge Companies, Summit Hotel Properties, Inc., Sunstone Hotel Investors, Inc., The Related Companies, Trinity Investments, Wheelock Street Capital, Woodbine Development Corp., and Wright Investments, Inc.

Examples of sellers (some of whom were also buyers) include: Banyan Investment Group, Baywood Hotels, G6 Goldman Sachs, Highgate, Hospitality Property LLC, Host Hotels & Resorts, Inc., Hyatt Hotels Corporation, JMI Realty, MCR, Northwood Investors LLC, Oxford Capital Group, LLC, Park Hotels & Resorts Inc., RLJ Lodging Trust, Square Mile Capital, Summit Hotel Properties, Inc., and Watermark Lodging Trust.

Recovery of the U.S. lodging industry continues to be uneven as drive to leisure-oriented markets are generally faring well, while many downtown urban markets continue to face challenges. Reduced staffing levels resulting from labor shortages has generally led to favorable increases in sector profitability. Due to the pandemic's outsized impact on travel recent hotel industry fundamentals have decoupled from historical correlations to metrics such as gross domestic product, corporate profitability, and consumer confidence, and has thus far bucked the trend of souring macroeconomic headlines. With this said, negative data points are becoming difficult to ignore. Near-term fundamental trends remain strong as the busy summer travel season is in full swing, and the lodging industry is benefiting from the buildup of consumer savings during the pandemic, and the release of pent-up demand including a return of inbound international travelers. Although business travel is returning with significant improvement in midweek hotel demand, the sector is focused on a potential slowing of demand and pricing as leisure travel wanes during the Fall back to school season. During the latter half of the year, continued airline disruptions which enhance the hassle of travel, combined with rising prices, will place negative pressure on hotel room night demand and pricing.

Instant Insights /

Here are the Major US Hotel Sales in the Second Quarter

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