David Gutstadt

"The U.S. hotel transaction landscape has been a challenging one in recent years, with a wide bid-ask gap and high cost of debt giving investors pause." #dshhoteladvisors #hospitalityindustry #realestateinvestment #hotels #hotelsandresorts #realestate https://lnkd.in/encD7aYG

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"High interest rates and a persistent bid-ask gap have kept hotel investors from closing as many deals in the first half of 2024 as they would have liked, but experts say conditions are improving to the point where the transactions market is likely to pick up in the second half of the year." #hotels #hotelsandresorts #hotelindustry #hospitality #hoteliers #dshhoteladvisors https://lnkd.in/eE-myAYH

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Where’s the New York City Hotel Market? Apparently showing ongoing signs of recovery… 1 Hotel Central Park sold yesterday for just above $1 million per key. According to New York City sales records from 2023 and 2024, upper-end hotels (Mondrian, The William Vale, and 1 Hotel Central Park) are trading between $800K and $1 million per room. Mid-market properties (like Hampton Inn, Hilton Garden Inn, and Doubletree) ranged from $400K to $600K per room. Distressed sales (the Roger Smith, Row NYC) were around $200K per key. Is the landscape shifting? What are your thoughts? #NewYork #Hotel #Hospitality #RealEstate #PrivateEquity

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In New York City, the scarcity of 2nd generation restaurant spaces has led to a resurgence in key money deals, presenting a unique opportunity for both restaurateurs and brokers. With fewer turn-key spaces available, key money deals offer a fast track to securing prime locations with existing infrastructure, which is becoming increasingly valuable in a competitive market. For restaurateurs, this means quicker openings and lower build-out costs, allowing them to capitalize on high-demand areas without the long wait times associated with new builds. For brokers, this trend highlights the importance of identifying and negotiating key money deals to meet the growing demand for ready-to-go restaurant spaces. In a market where time is money, key money assignments provide a strategic advantage in securing desirable locations and expediting the path to profitability. Leverage this knowledge to make informed decisions and set your restaurant up for success from the start! #RestaurantLeasing #CommercialLeasing #KeyMoney #NYCRestaurants #BrokerTips #LeaseNegotiation #TenantRepresentation #FoodAndBeverage #CommercialRealEstate #LeasingStrategy

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Today’s earnings reports for the hotel sector were not good, however not unexpected. All public hotel companies lowered their respective revenue guidance for full-year 2024; most missed on their Q2 revenue estimates. The very concerning part is that the public REITs are heavily weighted in the Luxury and Upper Upscale segments with portfolios in both leisure and urban locations. With two quarters in the books, nearly all public hotel companies have lowered their RevPAR guidance for 2024. Most have tempered their dismal outlook so not create a major sell off of stocks. So much for group demand... Furthering... July room demand will end flat to down. The latest weekly KPIs from STR showed an unexpected decrease in occupancy (-0.9%) for week ending July 27. We expect September to experience the largest YoY monthly decrease in room demand this year followed by December. Fact: September (2022 and 2023) and December (2022) are the only months that exceeded their respective pre-pandemic room demand level. Some analysts believe this is attributable to the uptick in the short-term rental market. That still doesn’t bode well for hotels if there is a global shift in traveler’s behavior. The most rooms sold (demand) in a month ever was July 2019. As of June 2024 (over four years later), 12-month demand has yet to recover to 2019 levels and demand has retreated from its highest post-pandemic 12-month period (ending March 2023). From a macroeconomic view, some economists have touted the resiliency of the U.S. economy. I have stated before that extended 12-month occupancy and demand decreases have preceded every modern era recession. I anticipate that this cycle is no different. There have been some recent concerning trends in the labor market with initial jobless claims coming in higher than expected today and ADP employment falling well below expectations. Are we instore for another increase in the unemployment rate? This will most certainly put the Sahm Rule into effect. Hotels and hospitality are heavily dependent on a strong labor market and healthy economy to just survive. When major industries are thriving, it translates to more travel and rooms sold. Today, the U.S. economy is wavering, which will eventually translate to less travel than we have seen in 2022 and 2023. If you are heavy on hotels, hopefully you have a long-term outlook and plenty of reserves; as I do not anticipate hotel room demand will reach the historical 12-month room demand levels of 2019 for at least two years. This will put pressure on ADR and RevPAR. Hotels will experience a major value disruption as lower demand and ADR = lower profits and lower valuations. Do not expect any monumental decreases in interest rates in 2024 to save value. These combined factors will cause a perfect storm that will send hotel real estate values plummeting over the next 12-18 months. Host Hotels & Resorts Park Hotels & Resorts Braemar Hotels & Resorts (BHR) Ryman Hospitality Properties

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Hotel Market Bifurcation - A Tale of Two Sectors The latest JLL Q3 2024 U.S. Hotel Investment Trends report reveals a fascinating split in the industry. While overall RevPAR is up 14% compared to 2019, the growth story is not uniform. Luxury and urban hotels are thriving, fueled by a rebound in corporate and international travel, while budget-friendly and leisure-focused properties are lagging due to softening consumer spending. The report also highlights significant regional differences, with some markets experiencing a surge in transaction activity while others remain more cautious. The Sunbelt, in particular, is experiencing a boom in hotel investment, with Orlando, Phoenix, and Miami leading the way in transaction volume. These destinations are attracting investors seeking a combination of strong leisure demand and growing corporate travel, fueled by vibrant economies and a favorable business climate. An interesting read to deeply understand the factors driving this split and how it's impacting hotel owners and investors. #hotelinvestment #hoteltrends #hotelinvesting #travel #economy #business #finance #realestate

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“You can’t buy back all of your interest on any given day because where would you get the money to do that if it’s all sitting in illiquid real estate?” #NAV #REITS: Excellent quick read from Urban Land Institute, citing ADISA's L&R Co-Chair and President-Elect John Grady, clearing up misinformation regarding Non-Traded REITS. "NTRs...were never meant to be liquid. Unlike volatile funds that trade on exchanges, NTRs were designed to give investors stable, long-term returns and allow issuers the ability to wait out the market and sell assets only at peak prices. Commercial property assets are, after all, much different from stocks by being fundamentally illiquid." https://lnkd.in/ezMimHYR

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Thank you to Jeff Weinstein and  Hotel Investment Today for sharing the LW Hospitality Advisors Q3 2024 Major U.S. Hotel Sales Survey. With 97 single-asset hotel transactions exceeding $10 million, Q3 activity surpassed $4.4 billion across roughly 16,600 rooms at an average sale price of $266,000 per key. This represents an 8% increase in trades and an 11% rise in dollar volume over Q2, underscoring the ongoing resilience and investor appetite in U.S. hospitality. The largest U.S. hotel sale transaction by Total Sale Price was the $1.07 billion sale of the 1,641-room Hyatt Regency Orlando by Hyatt Hotels Corporation to a joint venture between Ares Management Corporation and RIDA Development Corporation. The largest U.S. hotel sale transactions by Sale Price Per was The Frisbie Group’s sale of the 30-unit The Islands of Islamorada in Florida to The Wills Companies which traded for $2.4 million per key. The resort includes 22 waterfront villas and an eight-unit suite hotel, with plans to introduce the villas as luxury for sale residential units. As the market continues to adapt, LWHA stands committed to guiding stakeholders to formulate sound decisions in the hospitality investment landscape. To read the full article, check out the link in the comment section below. #HospitalityIndustry #HotelInvestment #HospitalityNews

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EQT Exeter Expands Footprint in Suburban Boston. A California-based real estate investment firm with a national portfolio of light industrial real estate, sold a pair of distribution centers in Taunton, Massachusetts, to EQT Exeter, the industrial real estate firm formed two years ago through the acquisition of Exeter Property Group by Swedish investment manager EQT AB. The two buildings traded for $37.35 million, or approximately $202.45 per square foot. The assets involved in the sale are located in the Myles Standish Industrial Park and were reported to be fully leased at the time of closing. They include 385 Myles Standish Blvd., 141,990-square-foot manufacturing facility that was recently leased by WorldPac, a wholesale distributor of automotive parts. It sold for an allocated $30.46 million. The other building at 295 Constitution Dr., is listed as a 42,500-square-foot warehouse and sold for an aggregated $6.89 million. https://lnkd.in/g_zRm8b7 #industrialreaalestate #propertyinvestment #realestateinvestment #realestatefirm #warehouse #milliondollarlisting #industrialbuilding

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"We take the ass out of asset management." - Peter Kressaty. During the recent NYU IHIIC, my LWHA Asset Management Group partner Peter Kressaty spoke with Glenn Haussman of No Vacancy News, Podcasts and Videos about third-party asset management in the lodging industry. Terrific discussion. What do you think? #hotelindustry #assetmanagement #hospitalityindustry

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🍝Toscanova, the elegant Italian Trattoria named after its celebrated executive chef partner Agostino Sciandri, is one of the latest additions to grace the enclave restaurants in Century City. Contact me today to schedule a consultation. @ronfilian@robertkluger@ivanabreu@hollyjensen#CommercialRealEstate #YourArea #BusinessOpportunities"

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🚀 Great news for one of Wilmington‘s star companies! 🚀 🔹 Incyte Corp. (NASDAQ: INCY), based in Wilmington, has just announced a groundbreaking acquisition of San Diego-based Escient Pharmaceuticals in a massive $750 million all-cash deal. 🔬 This strategic move grants Incyte access to Escient’s innovative small molecule therapeutics, specifically designed to target neurosensory inflammatory disorders. With this acquisition, Incyte will enrich its already impressive portfolio, which includes treatments for skin disorders and autoimmune diseases. 🌟 Escients' leading drug candidates, **EP262 and EP547**, are poised to tackle severe inflammatory skin conditions and symptoms associated with liver disease, respectively. These candidates could potentially offer new, effective treatments for millions suffering worldwide. 💡 Hervé Hoppenot, CEO of Incyte, emphasized that this deal aligns perfectly with their strategy to develop differentiated medicines and could lead to significant new product launches starting in 2029. 📊 While Incyte's shares saw a slight dip to $51.60 in early trading, the future looks promising with this expansion. The deal is expected to be finalized in the third quarter, pending U.S. antitrust approval. 🧬 Stay tuned as Incyte continues to pave the way in medical innovation and improving patient care! #realestate #Pharmaceuticals #Biotech

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NEWMARK WEEKLY LODGING INDUSTRY RECAP April 14 thru 20 Recent market volatility, including declining stock indices and a fluctuating 10-year Treasury yield, highlights the ongoing impact of the Fed's focus on combating inflation. Despite this turbulence, hotel investors have maintained their appetite for transactions, and we note strong activity and investor interest in the upscale and upper-midscale segments. This optimism is bolstered by a robust development pipeline and continued growth in group RevPAR, indicating underlying strength in the lodging sector. While rising interest rates pose a risk to borrowing costs, the industry seems well-positioned to navigate these challenges, particularly with continued attention to operational efficiency and strategies to boost revenue per available room. Analysts remain mixed on lodging stocks, as exemplified by Wedbush's downgrade of Airbnb and Barclays' REIT earnings preview. Yet, we have also seen a renewed focus on renovations and brand upgrades, signaling a long-term commitment to guest experiences. Importantly, the construction pipeline for new hotels is growing— a strong indicator of confidence in the industry's future. While economy hotels have lagged, overall industry data and a healthy deal flow show continued potential for hotel investment, provided investors are aware of the shifting capital markets dynamics. Download our Top 104 Hotel Market Nsights Reports: https://lnkd.in/gs_3nxyK Newmark Valuation & Advisory Newmark #NewmarkHotels #HotelMarkets

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The CMBS market has made a remarkable comeback in the first five months of 2024, with U.S. private-label CMBS issuance skyrocketing to $32.2 billion, up from $13 billion during the same period in 2023. This resurgence highlights the critical role of CMBS in commercial real estate (CRE) lending, now accounting for 14% of all U.S. CRE lending. Despite rising defaults, CMBS is effectively bridging the liquidity gap left by commercial banks. Major players like Goldman Sachs, Bank of America, and Blackstone are driving this growth, leveraging their substantial balance sheets to meet the increasing demand for securitized loans. With narrowing spreads and a favorable interest rate environment, CMBS continues to be a crucial source of capital for CRE borrowers and investors, offering a reliable alternative in a challenging market landscape. As the market adapts to changing economic conditions, CMBS stands out as a resilient and indispensable component of the CRE financing ecosystem. #CMBS #RealEstate #Finance #CRE #Investment #MarketTrends #EconomicRecovery #CapitalMarkets #CommercialRealEstate https://lnkd.in/eNYvb9Xv

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Despite what are very real headwinds (think GCE, RS regulation, interest rates, general market sentiment), multi-family and mixed-use properties accounted for over 77% of the total number of transactions in the first half of 2024 in Manhattan. There is still clear demand for the asset class, and I predict that isn't going to change any time soon (especially as pricing adjusts).

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It’s not efficient to finance a $430 million project with small tranches of capital. And yet we are on Small Change. In early April 2024, Small Change, launched an investment opportunity into 22 Drydock Avenue in Boston’s Seaport district. The property is slated to be the city’s first life sciences building to achieve LEED Platinum and net-zero carbon emissions and has very lofty DEI goals. Related Companies (led by a woman) was selected a few years ago by the City of Boston to develop 22 Drydock, an R & D building to be fully occupied by Vertex Pharmaceuticals (led by a woman). And Boston Real Estate Inclusion Fund (BREIF), negotiated a small position ($3.75 million) in the $130 million equity stack required for the project. Put another way, they further diversified the capital stack from a single, big, diverse investor to now include multiple investors—over 40 women and people of color to date. While the offering is not exclusively available to that group, BREIF is using its network to target diverse capital. This is an opportunity to invest alongside the big boys. While (disappointingly) it is not open to non-accredited investors (you can take that up with the SEC), it is a very big step forward to providing opportunity where normally there is none. Read the Q & A or go to the listing (https://lnkd.in/eEUfdJhb). Be quick. BREIF is closing in rapidly on it's maximum funding goal. https://lnkd.in/eYcrHWRk _____________________________ This is not a solicitation of an offer to buy or sell any securities. All investing is risky and involves the risk of total loss as well as liquidity risk. Past returns do not guarantee future returns. If you are interested in investing, please visit SmallChange.co to obtain the relevant offering documents. ______________________________ 👋 I’m Eve 🌇 In love with cities. 🚀 Disrupting the status quo at SmallChange.co 🎧 Rethinking real estate. For good. Liked this post? Want to see more? 🔔 Click the bell on my Profile 👥 Send me a connection request  #commercialrealestate #socialimpact #BIPOC #impactinvesting #cities Kirk Sykes

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🏨 Host Hotels & Resorts Exciting Acquisition in Nashville's Hospitality Scene! 🎉 🌟 Bloomberg reports that Host Hotels & Resorts Inc. acquired the renowned 1 Hotel Nashville and the neighboring Embassy Suites in a landmark transaction valued at over $500 million. 🤝 The acquisition was made from a consortium of esteemed owners, including Starwood Capital Group, Crescent Real Estate, and High Street Real Estate Partners, highlighting collaborative excellence in Nashville's dynamic real estate market. 🏙️ Situated in downtown Nashville, facing the iconic Music City Center, the 1 Hotel Nashville boasts 215 rooms and commenced operations in July 2022, offering guests a luxurious and unforgettable experience. 📈 This strategic move underscores Host Hotels' commitment to expanding its portfolio in high-growth markets, further solidifying its position as a leading player in the hospitality industry. 💼 Representatives for Starwood declined to comment on the transaction, while Host Hotels refrained from immediate response. Requests for comment from Crescent and High Street representatives remain unanswered at the moment. 🌟 Nashville's burgeoning real estate market continues to attract significant investment, with notable transactions including Bill Gates' Cascade Investment reportedly acquiring the Dream Hotel and Xenia Hotels & Resort Inc. purchasing the W Nashville. 🏨 In line with its growth strategy, Host Hotels previously agreed to acquire the Four Seasons in Jackson Hole, Wyoming, further enhancing its presence in upscale leisure destinations. https://lnkd.in/gdhkuDU2

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Veteran GOAT broker Bob Knakal distills the challenges of CRE 2024+: "And will owners put in fresh capital to effectuate a refinance? In a real-life example, a Midtown West asset was purchased for $110 million many years ago with $50 million in debt. The debt was at 3.5 percent and matured a year ago. The lender kicked the can for one year. They won’t do it again, and offered the borrower $35 million at 7.5 percent. The owner has the $15 million, but will he put it into the asset, which may be worth only $60 million today?  The calculus: Put in $15 million (which you need a return on) and see your mortgage payment go up by $875,000 per annum. With a 6 percent return required on the additional equity, the rent has to go up by 42 percent for the owner to break even. He is going to sell. Others facing the same circumstances, many of whom don’t have the $15 million, will also sell." Thank you Bob Knakal. @langdontitle can help buyers and sellers sort out issues to closing these deals.

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