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December 20, 2022

Hard Rock® Completes Acquisition of The Mirage Hotel & Casino®

Hard Rock International (HRI) on Friday received regulatory approval from the Nevada Gaming Commission for its acquisition of The Mirage Hotel & Casino from MGM Resorts International. HRI assumed operations control of the property as of 6 a.m. Monday, December 19. Under terms of the transaction, HRI paid $1.075 billion in cash for the operating assets of The Mirage Hotel & Casino. HRI entered into a long-term lease agreement with VICI Properties Inc. for the real estate property of The Mirage.

Las Vegas, Nevada, United States

December 20, 2022

MGM Resorts International Announces Completion of the Sale of the Operations of the Mirage

MGM Resorts International (NYSE: MGM) ("MGM Resorts" or the "Company") today announced it has closed on the sale of the operations of The Mirage Hotel & Casino ("The Mirage") to Hard Rock International ("Hard Rock") for $1.075 billion in cash.

MGM Resorts International

Las Vegas, Nevada, United States

External Article

December 8, 2022

Fed Rate Hikes Are ‘Emptying the Ocean of the Water,’ Barry Sternlicht Says

As the Federal Reserve is expected to hike interest rates again next week in its attempt to curb high inflation, billionaire real estate investor Barry Sternlicht says the U.S. central bank has missed the mark.

November 28, 2022

Spirides Provides $14 Million Construction Financing for Major League Baseball Player Hotel in Dunedin, FL

Spirides Hotel Finance Company has successfully provided, and the borrower has officially closed $14 million in construction-to-permanent mortgage financing from a Midwest U.S. headquartered bank to finance the development of a lodging facility in Dunedin, Florida for players of the Toronto Blue Jays Baseball Club, a Major League Baseball franchisee. Florida is well known for its multiple professional baseball Spring training facilities. After building in Dunedin their “second home,” a 65-acre, $100 million Player Development Complex training facility that includes a 115,000 square-foot multipurpose building, the Toronto Blue Jays Baseball Club had been searching for nearby consolidated quality housing for their major and minor league players to use as they rotate through for training when City of Dunedin officials introduced Toronto Blue Jays officials to Doug Anderson, an experienced Dunedin-based developer and general contractor who promptly orchestrated a deal to build the hotel and rent large blocks of rooms to the Blue Jays for the greater part of each year going forward.

Spirides Hotel Finance Company

Dunedin, Florida, United States

Opinion Article

November 8, 2022

Hotel Currents: Economics and Hotel Financial Performance

CBRE Hotels Research specializes in translating national and local economic conditions into measures of hospitality market and property-level financial performance now and into the future.

By Jack Corgel, Managing Director, CBRE Hotels’ Americas Research, CBRE Hotels

November 3, 2022

Rockbridge Closes $431 Million Fund VIII

Rockbridge is pleased to announce it has completed the final closing of its most recent value-add flagship fund, Rockbridge Hospitality Fund VIII L.P. ("Fund VIII") at $431 million of investor commitments, surpassing its target of $425 million. Fund VIII was backed by both long-standing investors and select new investors, including pension funds, foundations, endowments, insurance companies, asset managers, and private capital from family offices and high net worth investors.

November 2, 2022

Spirides Provides $6.3 Million Debt Refinancing + Cash Out for Holiday Inn Express in Latta, SC

Spirides Hotel Finance Company has just successfully provided, and the borrower has officially closed a $6.3 million mortgage loan from a southeast U.S. headquartered bank to refinance the existing mortgage debt plus take $1.5 million cash out of the Holiday Inn Express in Latta, South Carolina. The $1.5 million cash taken out of the loan proceeds will be used by the borrower as an owner’s cash equity down payment to build another hotel in North Carolina where they already own the land.

Spirides Hotel Finance Company

Latta, South Carolina, United States

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November 2, 2022

Economic Watch: Prices Continue to Rise Despite Fed’s Inflation Fight

Prices rose by 8.2% annually in September, up 0.4% from August. A 2.1% drop in energy prices was offset by broad-based price increases, particularly for housing, food and health care. Core inflation, which excludes volatile food and energy prices, increased 6.6% from a year ago and 0.6% from August. With core inflation remaining well above its 2% target, the Fed will continue aggressively tightening monetary policy. A 75-bp increase in interest rates is expected in November, followed by another significant increase in December.

Opinion Article

November 1, 2022

Controlling U.S. Hotel Utility Costs

Annual changes in U.S. hotel utility costs and in the Consumer Price Index (CPI), or inflation, have historically proven to be strongly correlated. As of August 2022, CBRE is forecasting CPI growth to be 7.7 percent in 2022, followed by another 3.6 percent in 2023. Since inflation has averaged just 2.2 percent since 2000, these inflation projections have hoteliers concerned about operating costs. Given that rising energy costs are a significant driver of the current rise in CPI, hotel managers are especially worried about utility department expenses.

By Robert Mandelbaum and Ethan Gabany

External Article

October 25, 2022

Hotel Developers Turn to C-PACE as Traditional Lenders Pull Back

As the availability of new-construction financing continues to tighten, an increasing number of hotel owners and developers are turning to commercial property assessed clean energy loans.

Opinion Article

October 25, 2022

2022 HVS Lodging Tax Report - USA

While the lodging industry is recovering from impacts of the COVID-19 pandemic, this twelfth annual HVS Lodging Tax Study quantifies the revenue impact of the pandemic over the past year. An analysis of 25 major US hotel markets shows that overall revenues have recovered to 2019 levels, but markets with high levels of leisure demand are faring better than those without. The lag in collections of lodging taxes will prolong the impact of the pandemic state and local government collection of the taxes. The report also provides historical data on tax rates and the collection and distribution of revenue from lodging taxes levied in all 50 States and the 150 largest US cities.

By Thomas Hazinski and Peter J Gonzalez

Opinion Article

September 27, 2022

Conference Takeaways – The Lodging Conference 2022

The halls of the JW Marriott Desert Ridge were buzzing this week as thousands descended upon the Phoenix resort for this week’s Lodging Conference. If you couldn’t make it to the event, here’s a quick recap of what you missed.

By Rodney Clough, President - HVS Americas, Denver, HVS

September 13, 2022

Watermark Lodging Trust Announces Stockholder Approval of Acquisition by Brookfield

Watermark Lodging Trust, Inc. (“Watermark,” “WLT” or the “Company”) today announced that, at a Special Meeting of Stockholders, the proposed acquisition of WLT by private real estate funds managed by Brookfield was approved by its stockholders. Under the terms of the previously announced merger transaction, WLT common stockholders will receive cash consideration of $6.768 per Class A share and $6.699 per Class T share.

Watermark Lodging Trust, Inc.

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Opinion Article

September 7, 2022

Part 2 | Long-run (1946-2020) Effects of Inflation on Hotel Operating Performance

In Part 1 of this series, I highlighted that hotel property investors transact to acquire both real estate and the operating businesses with their varying sets of revenues and expenses. This institutional arrangement is unlike those for most other commercial real estate investments in which the business owners make fixed rental payments to property owners while expenses are mostly variable. Hotel investments therefore come with counteracting exposures to inflation of operating revenues and expenses that may neutralize inflation impacts on profits (i.e., net operating cash flows). The statistical results reported in Part 1 suggest that hotel profits do not adjust to inflation. Over the period of 1946-2020 inflation positively influenced both total revenues and total operating expenses to the extent that they offset one another.

By Jack Corgel, Managing Director, CBRE Hotels’ Americas Research, CBRE Hotels

September 6, 2022

How to Leverage Costs and Maximize Profits Post COVID

The distinction between fixed and variable costs has blurred over time as technology, labor market conditions, and guest preferences have evolved. These trends have been exacerbated by changes in occupancy patterns post COVID. Hotel owners and operators need to understand how these changes affect strategies for maximizing profitability.

Opinion Article

August 29, 2022

Bonus Depreciation Fading Away

Bonus Depreciation is fading away over the next 5 years. With the help of the IRS Section 179 Deduction and still powerful Bonus Depreciation, lodging Owners can save thousands of dollars in federal income tax savings in 2022 and beyond.

By Walter O'Connell, Managing Director of Hotel Valuation & Cost Segregation Services, LLC (HVCSS) and a consultant, Cayuga Hospitality Consultants

August 18, 2022

myDigitalOffice in the top 12% of fastest-growing private companies in the U.S

myDigitalOffice (MDO), the world's fastest growing hotel performance management platform, today announced its rank on the annual Inc. 5000 List, which highlights the fastest-growing private companies in America. Following a three-year run where the company grew by over 1,000%, MDO came in at #608 overall, and is the sixth fastest growing private company in all of Travel and Hospitality.

Opinion Article

August 3, 2022

Part 1 | Long-Run (1946-2020) Effects of Inflation on Hotel Operating Performance

The recent price surge for many goods and services in the U.S. raises the prospect for an extended period of persistent high inflation. Conventional measures of inflation track either specific sets of prices that consumers pay, notably the Consumer Price Index (CPI), or for economywide spending - Personal Consumption Expenditures (PCE).

By Jack Corgel, Managing Director, CBRE Hotels’ Americas Research, CBRE Hotels

June 1, 2022

RobertDouglas Advises Chartres Lodging Group on the Refinancing of Dr. Wilkinson’s Backyard Resort & Mineral Springs in Calistoga, Napa County

RobertDouglas advised Chartres Lodging Group in successfully refinancing its existing loan for the recently renovated, 50-key room Dr. Wilkinson’s Backyard Resort & Mineral Springs in Calistoga, California with a best-in-class institutional balance sheet lender.

Calistoga, Napa County, California, United States

Opinion Article

June 1, 2022

How Do Changes in the 10-Year Treasury Rate Affect Hotel Capitalization Rates

On December 31, 2021, the constant maturity, 10-year U.S. Treasury note (the 10-year) stood at 1.52 percent. The 10-year now hovers around 3.0 percent and the prospects for higher rates appear good. During the data period for the analysis presented below, the 10-year ranged from 0.65 percent to 6.70 percent and last exceeded 5.0 percent in 2006. A concern among commercial real estate investors (especially hotel investors because of the high sensitivity to macroeconomic conditions) is a rate-driven economic slowdown that threatens property income growth. Given the linkages across capital market rates, investors are concerned about the possible upward movement in hotel capitalization rates (cap rates) promoted by increasing 10-year rates. This blog addresses the sensitivity of hotel cap rates to changes in the 10-year.

By Jack Corgel, Managing Director, CBRE Hotels’ Americas Research, CBRE Hotels

Will Agentic Hotel Bookings Flourish or Fizzle?

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