INVESTMENT
Emergency Management Agency ( FEMA ) to shelter individuals experiencing homelessness during the COVID-19 pandemic . To reflect an intent to ensure more permanent shelter and services , at the end of June 2020 , the State renamed Project Roomkey to Homekey . Homekey has the financial backing of US $ 1.3 billion in funds available through the 2020-21 Budget Act and will facilitate local jurisdictions ’ efforts in acquiring and rehabilitating hotels , motels , vacant apartment buildings , and residential care facilities .
During Fall 2020 , King County in Washington State , which includes the cities of Seattle and Bellevue , introduced the Health through Housing initiative , which dedicates one-tenth of a cent of sales tax revenues for the purchase of hotels , motels , and other single room settings for use as emergency and permanent supportive housing for people experiencing chronic homelessness in the county .
Of the 248 single asset U . S . hotel sale transactions over US $ 10 million ( LWHA Major U . S . Hotel Sales Survey ) that have occurred since the beginning of 2020 , 36 properties were acquired by private and governmental entities for conversion to an alternative use . These assets include more than 7,200 rooms sold for nearly US $ 1.5 billion in total sales volume .
• Noteworthy hotels that have been acquired under the Roomkey / Homekey program include the 146-unit Extended Stay America - San Jose Milpitas , California ( US $ 445,000 per unit ); the 192-unit Residence Inn by Marriott San Diego Mission Valley in California ( US $ 349,000 per unit ); the 95-unit TownePlace Suites by Marriott Redwood City Redwood Shores , California ( US $ 308,000 per unit ); the 33-room Ramada by Wyndham Marina del Rey , California ( US $ 303,000 per unit ); the 130- room Hotel Diva San Francisco , California ( US $ 370,000 per unit ); and the 144-unit Residence Inn by Marriott San Diego Central , California ( US $ 274,000 per unit ).
• Thus far during 2021 , King County , Washington , has acquired the combined 232- unit Extended Stay America - Seattle - Federal Way and Extended Stay America - Seattle – Northgate ( US $ 290,000 per unit ); the 110-unit Extended Stay America - Seattle – Renton ( US $ 260,000 per unit ); the 80-room Inn at Queen Anne Seattle ( US $ 206,000 per unit ); the 144-unit Silver Cloud Inn – Redmond ( US $ 196,000 per unit ); the 99-room Holiday Inn Express & Suites North Seattle – Shoreline ( US $ 177,000 per unit ); the 95-room Clarion Inn Auburn Seattle ( US $ 124,000 per unit ); and the 90-room Red Lion Inn & Suites Federal Way , Washington ( US $ 122,000 per unit ).
Significant urban U . S . hotel assets that have sold :
• for conversion to an alternative use include , the 1,152-room Marriott Wardman Park Washington , D . C . ( US $ 132,000 per key ); the 223-unit Georgetown Suites Washington , D . C . ( US $ 150,000 per unit ); and the 259-room Fairfax at Embassy Row Washington , D . C . ( US $ 224,000 per unit ).
• for demolition to make way for mixed-use development include , the 197-room Salisbury Hotel New York City ( US $ 660,000 per unit ); the 178-room Sheraton Bellevue Hotel , Washington ( US $ 871,000 per unit ); the 102- room Americana Hotel Arlington , Virginia ( US $ 441,000 ); and the 299-unit Residence Inn by Marriott Arlington Pentagon City , Virginia ( US $ 497,000 per unit ). Announcement of the permanent closure of several major urban New York CIty assets include : the 102-year-old 1,704-room Hotel Pennsylvania ; the 97-year-old 1,015- room Roosevelt Hotel ; the 1,342- room Grand Hyatt ; the 698-room Maxwell Hotel ; the 636-room New York Marriott East Side ; the 167- room Courtyard by Marriott New York Manhattan / Herald Square ; the 876-room Hudson Hotel ; the 480- room Novotel Times Square ; and the 395-room Omni Berkshire Place .
Notable permanent hotel closures in other major U . S . cities include the 86-room Luxe Rodeo Drive Beverly Hills , California ; the 139- key Standard Hollywood in West Hollywood , California ; and the 132- room Hotel Buckminster in Boston , Massachusetts .
When new hotel supply enters a market , there is the potential for significant disruption at existing properties . However , net new hotel supply should also be considered as hotels that permanently close can appreciably reduce a disruption . Therefore , before reacting the next time you learn of a market glut of new lodging development , consider how many , if any existing stock may become deleted due to permanent hotel closures .
76 hotelsmag . com November / December 2021