Lodging Stocks Follow Rest of the Market Down

The sell-off in the financial markets accelerated with the DJIA down 1,034 points, Nasdaq was down 576, the S&P 500 fell 160 points, and the 10-year treasury declines moderated, only down .01 to 3.78%. Lodging stocks took a hit. The one bright spot was SHCO, which was up 6%, but that was it. RLJ, VCSA, and VAC each traded down to new 52-week lows, with VCSA down -7% and VAC down -6%. CLDT, PEB, and SVC were each down -7% on the day, while SOHO fell -6%.

Compass Point cut their rating on RLJ Lodging Trust to Neutral from Buy. Their target price is $10.

In mid-June, construction company Metcalf broke ground on the Home2 Suites hotel in Carson City, Nevada. Expected to be completed by fall 2025, the new four-story, 91-suite hotel is owned by Carson City Hotel LLC.

Hyatt Regency Greenwich and Trinity Investments announced a nearly $40 million renovation of the Connecticut property. The top-to-bottom transformation encompasses updates to the pool and fitness center, a new atrium event space, the introduction of Glenna’s Café and Market alongside Townsend Bar and a complete remodel of all 374 guestrooms and suites. The next set of enhancements, expected to be finalized by the end of summer 2024, focuses on the common spaces. The atrium-style lobby will be entirely redesigned, and the library lounge will be just off the lobby. Renovated guestrooms will be available for booking starting in August, with the complete hotel redesign set to be unveiled in November.

IHG Hotels & Resorts announced the opening of a newly converted and rebranded voco hotel in Tucson, Arizona. voco The Tuxon features 112 guestrooms, a full-service restaurant/pool bar and an outdoor pool. The hotel is owned by 2438 N Palo Verde Ave LLC and managed by Aligned Hospitality.

JK Land Holding LLC is planning a mixed-use development at the waterside site in Sterling, Virginia. The property comprises 225 acres, including the Chantilly Crushed Stone quarry that would become a lake, and 3 million square feet of mixed use spaces including multifamily, age-restricted housing units, office, hotel, retail and civic space.

After the passage of Hurricane Otis, which left the hotels in the port of Acapulco destroyed, the remodeling and reconstruction works in these properties will make several of these hotel facilities classified in a better category. The Secretary of Tourism of Guerrero, Simon Quinonez Orozco, stated that several hotels will be upgraded from 3 to 4 stars and from 4 to 5 stars. Without specifying how many hotels need to be upgraded, Quinonez Orozco said that 221 hotels are already operating in Acapulco, with a total of 10,807 rooms, most of them renovated and many of them in the process of being renovated by next December. Nine months after the impact of Hurricane Otis in Acapulco, 80% of the hotels are already open. This summer, the port expects the arrival of 594,000 tourists and a hotel occupancy rate of 70%.

A proposal for a major renovation of the Franciscan Guest House at a monastery in Kennebunk, Maine is making its way through the town’s site plan review process. The Society of Franciscan Fathers of Green, Maine, which owns the property, is looking to renovate both the interior and the exterior of the Franciscan Guest House, with plans for relocating guest rooms, modernizing facilities, updating the façade, expanding parking opportunities, and upgrading utilities. The site plan also calls for a name change to the Canticle Hotel. The property comprises three structures: the main guest house offering 35 rooms, the White House with eight rooms, and the Tudor House with 22 rooms. The project calls for the White House to be demolished, and its eight rooms will be transferred to the main guest house. Also, as part of the plan, the Tudor House will be renovated to have 12 rooms, and the remaining 10 rooms will be relocated to the main guest house. The project also involves the creation of a partial second floor in part of the main guest house wing where the gym once existed. This wing would become the new main entry for the Canticle Hotel, complete with a new lobby, check-in area, a restaurant and two small meeting rooms. The pool and pool house currently at the site will remain.

One of the first motels to open in the state of Maine, The Nevada, after a thoughtful renovation, has been transformed into a 21-room luxury beachfront hotel in the town of York. Joe Lipton and Michelle Friar are the owners of the historic motel which features a new restaurant and upscale tiki bar.

The second-largest hotel in Chicago is at the center of a legal battle over a $333 million distressed loan. Bondholders represented by trustee Wells Fargo have sued JPMorgan Chase & Company for failing to disclose crucial information about the ownership of the historic 1,641-room Hilton Palmer House Hotel. Thor Equities subdivided the property into three separate parcels after it bought the property two decades ago, and two of the parcels were assigned to affiliate entities. This ownership subdivision has complicated the foreclosure process, which began after the hotel owner defaulted on a $333 million loan in 2020 due to the pandemic. The bondholders, which include BlackRock and MetLife, contend that JPMorgan, which provided the loan in 2019 and packaged it into a CMBS, failed to disclose the hotel’s complex subdivision.

The former Trump International property, now the Waldorf Astoria DC, had only one bid at today’s auction. Affiliates of BDT&MSD Partners, the debt holders on the leasehold interest, cast the lone bid of $100 million. BDT&MSD said they moved to reclaim the 263-room property after exhausting other means of resolving the issues surrounding CGI Merchant Group’s loan default. CGI issued a statement saying they were able to secure the necessary financing to cure the loan default on the Waldorf Astoria DC prior to the auction today. CGI BDT & MSD Partners and other parties were made aware of this prior to the auction, but the process proceeded anyway. They are disappointed but will continue fighting for the property. Hilton, the operator, said they look forward to operating the property for many years to come under their long-term management agreement.

Sunrise Realty Trust and Southern Realty Trust have committed $42 million toward a senior loan to refinance the Thompson San Antonio hotel. The 20-story property, developed by DC Partners, features 162 hotel rooms and 59 luxury condos. Southern originated the loan, and Sunrise accounts for $27.3 million of the balance. Southern will hold the remaining $14.7 million.

HREC Investment Advisors arranged the sale of the 111-guestroom Hampton Inn & Suites Charlotte/Pineville, located in Pineville, North Carolina. The property was acquired by Shah Management. HREC Investment Advisors exclusively represented Legendary Capital in this transaction.

International Highlights 

The Cabot Collection announced the portfolio addition of Golf Du Medoc Resort, a premier destination for golf and wine enthusiasts located in Bordeaux, France. The property, now known as Cabot Bordeaux, is set across 400 acres, showcases two 18-hole championship golf courses, and includes a 79-room hotel, refined restaurant, and a world-class spa featuring a heated indoor pool, hammam, fitness room and a variety of treatments.

The Beaumont Mayfair announced the completion of a stunning multi-million-pound renovation to coincide with its 10th anniversary. Located in London, The Beaumont Mayfair features 101 rooms and suites, including Anthony Gormely’s famous ROOM, an exquisite collection of art, as well as chic F&B spaces. The Art Deco Hammam and Spa features a traditional warmed, marble hammam table, sauna and steam rooms; four treatment rooms and a relaxation area. A range of beauty therapy, hammam and massage treatments is offered, as well as hairdressing services.

Ennismore and Kasada announced the signing of Hyde Johannesburg, marking a series of significant milestones, including Ennismore’s first hotel in Johannesburg, the first Hyde hotel in Africa, and Kasada’s first investment in Johannesburg and fourth in South Africa. Hyde Johannesburg will have 131 rooms, including 31 suites and a gym. The hotel will undergo a soft renovation to reposition it. The mixed-use building also comprises Proud Mary, one of the most successful restaurants in the city; a lobby lounge; meeting rooms; 7,400 square meters of fully leased co-working, office and commercial spaces.