Hotel Sales in DC Averaging $400,000 Per Key

WASHINGTON, DC-Enough hotel trades have now occurred in the DC area that brokers feel comfortable talking about pricing--on the record no less. With the latest transaction in the works--Pebblebrook Hotel Trust is acquiring DC’s Hotel Monaco for $74 million, or $400,000 per key--the bar has been set, says Marc Magazine, who recently opened the doors on McLean, VA-based Humboldt Hospitality Advisors with former CB Richard Ellis colleagues Tom Baker and Dave Durbin. “The market has reached a platform of $400,000 per key for full-service hotels and I believe prices will start climbing from there,” he tells GlobeSt.com. 

There have been a number of trades in recent months--and more are expected to come to market within the next 60 to 90 days, according to Magazine. One new property on the market that is being watched closely is the Madison Hotel in the District. “My guess is that they will try to sell that for over $100 million,” Magazine says. “The buyers, though, will have to put in substantial renovations to change the brand and the concept.” 

The reason for the activity is not difficult to guess: products have started to move after the Sofitel sale earlier this year--the first trade in close to two years. That, coupled with the pent-up investment dollars sitting on the sideline, has opened the door to these transactions.

Then there is the lure of DC itself. “Everyone wants to invest in hotels here,” Magazine says. Other recent trades include the sale of the Fairview Park Marriott to a partnership organized by Thayer Lodging Group. Pebblebrook Hotel made an earlier acquisition here of the Doubletree Bethesda Hotel and Executive Meeting Center for $67.1 million. The Watergate Hotel traded for $45 million, acquired by Euro Capital Partners. The transaction that broke the ice, however, as Magazine says, was LaSalle Hotel Properties’ $95-million acquisition of Sofitel Lafayette Square.