Comparing 2019 with 2018, the number of trades decreased by approximately 21 percent while total dollar volume declined roughly 3.3 percent and sales price per room increased 1.9 percent.

Comparing 2018 with 2017, the number of trades increased by approximately 14 percent while total dollar volume rose roughly 35 percent and sales price per room increased by 34 percent. Notable observations from the LWHA 2019 Major U.S. Hotel Sales Survey include:

• Sixty-six or 40 percent of the total number of 2019 sale transactions occurred in three states. With thirty-six 2019 hotel sales, Florida has been the most active transaction market followed by California and New York with eighteen and twelve trades, respectively.
• Thirty-four of the 164, or 21 percent of 2019 U.S. hotel sale transactions, were for greater than $100 million each. Eighteen of the 2019 hotel trades were between $100 and $199 million. Five of the 2019 hotel sales were between $200 and $299 million.

Top Sales

Some examples include Marriott International Inc., which acquired the 270-room W Union Square Hotel in New York, NY for $206 million or $763,000 per key, a 20 percent premium to the price the property traded for roughly a year ago when Westbrook Partners paid Host Hotels & Resorts, Inc. (HST) $171 million for the asset. The property sold for $285 million back in 2006, but then also traded in 2010 for $185 million when HST purchased it. This strategic acquisition dovetails with Marriott's broader growth and brand-related objectives as the company intends to significantly renovate and reimagine the property into a "showcase" hotel for the W brand in North America. Furthermore, a motivating factor for MAR to complete this non-asset- light transaction was to protect the flag, given the property's lack of brand and management encumbrances. This buy-renovate-sell-manage playbook is familiar and follows MAR's successful execution with three EDITION properties, the Charlotte Marriott City Center and the Sheraton Grand Phoenix, which is currently in process.

Another example is Host Hotels & Resorts sale to KSL Capital Partners the 470 key Hyatt Regency Cambridge Hotel in Cambridge, MA for $227.3 million, or $484,000 per room. A robust hotel transaction market paved the way for HST to monetize a low RevPAR, high capital expenditure asset at appealing pricing,

Premier Group WLL based in Bahrain acquired the 215 room Four Seasons Hotel One Dalton Street, Boston for $268 million, or $1.25 million per unit from Carpenter & Company, Inc. who recently developed the property with a 61-story mirrored glass tower that separately includes a 160 Four Seasons Private Residences.

RIU Hotels & Resorts, a Spanish hotel chain aggressively expanding in the U.S. acquired from Acron U.S. Management Inc., the 531 key Sheraton Fisherman's Wharf Hotel in San Francisco, CA for $270.3 million or $509,000 per room. The property was rebranded as the Hotel Riu Plaza Fisherman's Wharf,

Magna Hospitality Group acquired the newly constructed 576-unit dual branded Fairfield Inn & Suites New York Manhattan/Times Square South & SpringHill Suites New York Manhattan/Times Square South for $274.3 million, or $476,000 per key from McSam Hotel Group.

Of the 2019 trades two were for between $300 million and $399 million.

One was Marriott International's sale of the iconic 238 key St. Regis New York Hotel to Qatar Investment Authority for $310 million or $1.3 million per room. Earlier in the year Qatar's sovereign wealth fund announced an investment in the shops at the base of the St. Regis New York Hotel. MAR, who will continue to operate the asset under a long-term contract, acquired the trophy property when it acquired Starwood Hotels & Resorts Worldwide LLC.

The other was Blackstone purchase of the 1,260 room Hyatt Regency Atlanta for $355 million or $282,000 per unit from Hyatt Hotels Corporation who will continue to operate the facility. Opened in 1967, the Hyatt Regency Atlanta was designed by internationally acclaimed architect John C. Portman, Jr., and was the first contemporary atrium-style hotel ever constructed.

Three of the 2019 trades were for between $400 million and $499 million.

These included a syndicate comprised of AllianceBernstein & GMB Properties, The Berger Co., & Fulcrum Hospitality that acquired the 1,193 room Hyatt Regency New Orleans from Poydras Properties Hotel Holdings Co. for $400 million, or $335,000 per unit.

A second was British luxury hotel operator Maybourne Hotel Group purchase from Ohana Real Estate Investors of the 201 key Montage Beverly Hills in Beverly Hills, CA for $415 million, or almost $2.1 million per room,

A third was KSL Capital Partners' sale to Ohana Real Estate Investors of the 400-unit Monarch Beach Resort in Dana Point, CA for $497 million, or $1.24 million per room.

Five of the 2019 trades were for between $500 million and $999 million dollars.

Caesars Entertainment Corporation (Caesars) sold the 2,548-unit Rio All-Suites Hotel & Casino in Las Vegas to Imperial Companies for $516.3 million, or $203,000 per unit. Caesars will continue to operate the property pursuant to a lease for a minimum of two years at $45 million in annual rent. The transaction also provides the buyer an option to pay Caesars an additional $7 million for the extension of the lease under similar terms for a third year. Caesars reportedly will retain its rewards customers and the hosting rights to the annual the World Series of Poker,

A joint venture between Trinity Real Estate Investments LLC and Elliott Management Corporation acquired the 950 room JW Marriott Phoenix Desert Ridge Resort & Spa for $602 million, or $634,000 per unit,

Subsequent to a reported more than $500 million acquisition by MSD Capital Partners, L.P., Host Hotels & Resorts acquired the 429 room 1 Hotel South Beach for $610 million or more than $1.42 million per room from a joint venture between Starwood Capital Group & LeFrak Organization,

MSD Partners, L.P. acquired of the 1,047 room Boca Raton Resort and Club, A Waldorf Astoria Resort from Blackstone for $875 million, or $836,000 per room,

MGM Resorts International sold the 3,767 room Circus Circus Hotel & Resort in Las Vegas, NV for $825 million, or $219,000 per room to an affiliate of Treasure Island owner Phil Ruffin. A $4.25 billion sale-leaseback transaction of the 3,900 room Bellagio Hotel & Casino in Las Vegas, NV represents the highest amount ever paid for a U.S. hotel casino. The $1.1 million per unit deal includes 155,000 square feet of casino space, and the seller MGM Resorts International (MGM) agreed to a 30-year lease with two ten-year extension options with an "initial" annual rent of $245 million. MGM also retained a 5% ownership stake in the property.

Six U.S. hotel sales occurred at more than one million dollars per room including:

• Bellagio Hotel & Casino Las Vegas, NV – $1.1 million
• Monarch Beach Resort Dana Point, CA – $1.24 million,
• Four Seasons Hotel One Dalton Street, Boston – $1.25 million,
• St. Regis New York, NY – $1.3 million,
• 1 Hotel South Beach Miami, FL – $1.4 million,
• Montage Beverly Hills, CA – $2.1 million.

Capital Market Plays

During 2019, an abundance of capital fueled robust activity with lodging sector mergers, acquisitions, and spinoffs. Significant transactions included Marriott International's acquisition of UK-based Elegant Hotels Group (Elegant) for a total consideration of $199 million. Elegant owned and operated seven luxury all-inclusive properties with 588 rooms and a beachfront restaurant in Barbados, a market in which MAR had only one property, namely an off-beach Courtyard. In keeping with its asset-light strategy, MAR intends to market the hotels for sale subject to long-term management agreements.

Another was InterContinental Hotels Group's acquisition from Pegasus Capital Advisors the brands and operating companies of Thailand-based Six Senses Hotels Resorts Spas for $300 million in cash.

In a deal worth an estimated $1 billion, Advent International-backed hotel operator Aimbridge Hospitality acquired Interstate Hotels and Resorts from Kohlberg & Company. The merger of two significant independent hotel operators resulted in a combined management portfolio of more than 1,400 hotel properties in 49 states and 20 countries.

Also, Park Hotels & Resorts Inc. closed a $2.7 billion acquisition of Chesapeake Lodging Trust.

As part of a $2.9 billion joint venture transaction between Blackstone Real Estate Partners IX (Blackstone) and Centerbridge Partners, L.P., Blackstone acquired a 65% controlling interest in Great Wolf Resorts, Inc. The transaction included 18 owned and operated family-oriented water park entertainment resorts around the nation.

A reported frenzied bidding process amongst more than a dozen investor groups facilitated Anbang Insurance Group Co.'s (Anbang) disposition of a 15-property luxury hotel portfolio for $5.8 billion to Mirae Asset Global Investments. The collection, which was formerly owned by Strategic Hotel & Resorts was purchased by Anbang from Blackstone in 2016.

In a deal scheduled to close in early 2020, Eldorado Resorts Inc. definitively agreed to purchase Caesars Entertainment Corp. for approximately $8.58 billion in cash and stock, a merger that will create the largest U.S. casino operator by venue count.

Daniel H. Lesser is president & CEO of LW Hospitality Advisors LLC.