|
bet , however , that Blackstone will pile back into hotels this year , evidenced by Trebilco ’ s statement that it could buy in the neighborhood of $ 5 billion worth of domestic hotels , though not stating if it would be by piecemeal or portfolios .
Why the change in course ? “ Things are shifting ,” he said . “ The cost of capital is coming down . Being patient has been a good thing .”
Transactions last year were flimsy both volume and dollarwise : According to JLL , global hotel transactions hit $ 50 billion in 2023 , $ 23 billion less than in 2022 . Expectations for 2024 are much better and part of it will be hotel
|
owners ’ being forced to sell , due to variables such as loan maturities , refinancing costs and the specter of property improvement plans that the brands now expect after years of deferment due to the pandemic .
“ It ’ s starting to play out ,” Trebilco said , adding that Blackstone itself has already invested some $ 2 billion in CapEx into its existing portfolio , including Hotel Del Coronado , which it acquired in 2011 , and put $ 160 million into last year , and Grand Wailea , a Waldorf Astoria hotel , it paid more than $ 1 billion for in 2018 .
BRAND BINGO Mit Shah , founder and
|
CEO of Noble Investment Group , which has some $ 4 billion in hotel assets under management , mostly in the select-service and extendedstay segments , sees a wave of PIPs coming , or else . “ Brands are trying to figure out how to get hotels renovated ,” he said , |
THE COST OF DEBT HAS ELEVATED AND HAS CONSTRAINED LEVERAGE
– SCOTT TREBILCO , SENIOR
MANAGING DIRECTOR ,
BLACKSTONE
noting that the CapEx spend that dropped 40 % during the Great Financial Crisis , actually doubled in Covid . “ Those dollars are going to be needed ,” he said , and if they don ’ t come to the fore , expectations are for a parade of sales as bid / ask spreads narrow .
|