The ups and downs of the 2025 US hotel transactions market
The ups and downs of the 2025 US hotel transactions market
The year turned out to be a more difficult year for hotel deals than originally expected back in January, but it wasn't impossible.
Big or small, an individual deal or a whole portfolio, buyers and sellers were able to agree on terms despite the economic uncertainty, geopolitical tensions and wavering hotel demand.
Below are selections of CoStar News Hotels' coverage of U.S. hotel transaction environment in 2025.
Kicking off the year, in a podcast interview, Peachtree Group Managing Principal and CEO Greg Friedman said that due to the options available, borrowers would have an easier time accessing capital for their deals and projects.
"If you're wanting and you're willing to move forward with projects, I think you're going to be able to find the capital in 2025," he said. "If you're able to be somewhat creative, I think you're probably going to find a much more accretive structure."
Hotel investors speaking at the 2025 Americas Lodging Investment Summit said they hoped the year would prove to have a more active transaction market now that the Federal Reserve was cutting rates and the presidential election was in the past. During one executive panel, Stephen Zsigray, president and CEO of Ashford Hospitality Trust, said a major hurdle that remained was pricing expectations between buyers and sellers, but more aggressive property improvement plan requirements and debt maturities could push more owners to sell.
"I think we'll see that bid-ask spread come in quite a bit here in 2025 and find a point in the middle that makes sense," Zsigray said.
Hyatt Hotels Corp. announced in early February its plan to buy Playa Hotels & Resorts for $2.6 billion and then sell off the owned real estate with a target of $2 billion in sales. The acquisition closed June 17, and Hyatt worked out a deal to sell a portfolio of 15 all-inclusive resorts to Tortuga Resorts, a joint venture of KSL Capital Partners and Rodina, for $2 billion.
“The planned real estate sale to Tortuga transforms the acquisition of Playa Hotels & Resorts into a fully asset-light transaction and increases Hyatt’s fee-based earnings,” Hyatt President and CEO Mark Hoplamazian said in a news release. “Hyatt has secured long-term, durable management agreements and the planned real estate sale demonstrates Hyatt’s commitment to its asset-light business model and ability to deliver value to shareholders that is accretive in the first full year.”
Executives at hotel real estate investment trust Park Hotels & Resorts announced in their full-year 2024 earnings call they intended to sell between $300 million and $400 million in non-core assets this year while investing up to $330 million into the remaining portfolio. In December, the company shared it had sold, entered into agreements or had letters of intent to sell five non-core hotels for approximately $198 million. By the end of the year, it expected to sell another three non-core hotels with expiring ground leases.
In an interview with CoStar News Hotels, Trinity Investments President and CEO Sean Hehir said he expected a good year for deals, adding the company had a "robust acquisition pipeline."
On top of regular deals, Hehir said Trinity had the opportunity to be a source of rescue capital for other owners.
“I think we would like to be a friendly source of rescue capital for that segment, in addition to our regular day job of buying, fixing, repositioning hotels,” he said.
In March, Trinity and Axonic Capital took ownership of the 1,249-key Hilton Atlanta with a $191 million credit bid at a foreclosure auction.
On the disposition side, Trinity sold in May for $865 million the 950-key JW Marriott Phoenix Desert Ridge Resort & Spa and its accompanying golf courses. It bought the property in 2019 from Blackstone for $602 million and invested $100 million into the resort.
Months later, in September, Trinity and its partner Certares Real Estate Management sold the 352-key lifestyle hotel EAST Miami to Blackstone Real Estate. CoStar data shows the property sold for $300 million.
Investment firm Gencom grew its presence in New Orleans in March by purchasing the Ritz-Carlton, New Orleans and the Courtyard by Marriott New Orleans French Quarter Iberville. CoStar data shows the deal price as $195 million.
By mid-year, it was clear to the hotel investment community that their earlier transaction predictions weren't playing out as they thought. Dan Peek, president of JLL Americas Hotels & Hospitality, said people weren't sure where to place their bets, and while some were still trying, others stayed on the sidelines.
“So, we're in another price discovery phase,” he said. “Are we going to have interest rate relief? Is that [lower] consumer and corporate confidence going to find its way into performance and result in lower performance and, as a result, lower pricing?”
At the 2025 NYU International Hospitality Investment Forum, finance and hotel executives said that while the first half of the year was challenging, the second half still held opportunities.
In a video interview during the conference, Kevin Davis, Americas CEO of JLL Hotels & Hospitality, had similar sentiments, saying there was potential for deals activity to pick up as the macroeconomic factors at play settle down.
"I think what's going on is there's a bit of a resetting and reframing as to how investors are thinking about the market," he said. "As we get into probably late third quarter, fourth quarter, we can start to see some resolution, and people start to just transact and again, supported by the sales market, supported by a strong debt market."
Smaller deals, those at the $50 million or below level, were making up a significant portion of the deals volume.
That said, buyers were still making the big deals. Blackstone Real Estate-associated funds bought the 785-key Sunseeker Resort Charlotte Harbor, now the Sunseeker Resort Florida Gulf Coast, Curio Collection by Hilton, and the accompanying Aileron Golf Club from Allegiant Travel Co., for $200 million.
In late August, hotel REIT Braemar Hotels & Resorts announced plans to sell its entire portfolio of luxury hotels and set a termination fee with its external advisor, Ashford Inc., at $480 million.
Months later, hotel REIT Ashford Hospitality Trust, which also has Ashford Inc. as its external advisor, shared it was also considering strategic alternatives, including a possible sale.
“However, we remain frustrated by the discrepancy between the value of our underlying portfolio and the market value of our common stock, and the board has tasked the special committee with proactively exploring alternatives to bridge that gap," President and CEO Stephen Zsigray said in a statement.
A fund managed by Magna Hospitality sold in October four hotels for $489.8 million to a group of undisclosed "large institutional owners" along with a separate Magna fund that will maintain partial ownership.
A joint venture of Kemmons Wilson Hospitality Partners and Ascendant Capital Partners announced in late October it would acquire hotel REIT Sotherly Hotels in an all-cash offer to buy the outstanding shares of the common stock for $2.25, a 152.7% premium over the REIT's closing share price on its last trading day before the announcement. At the time, Sotherly had a market cap of $18.24 million.
At the Lodging Conference, hotel executives addressed the growing pressure on the transaction market, pointing to the factors at play pushing owners to sell.
“It does depend on the catalysts — the narrowing of the bid-ask spread, what does a refinancing look like? Are you going to have to put capital back into it? Those are catalysts pushing people toward a sale,” said said Kate Henriksen, co-chief investment officer RLJ Lodging Trust.. “And the longer deals fester or hotels fester out there, there is more pressure to transact.”
Noble Investment Group capped off a busy year by buying a portfolio of 35 extended-stay hotels from Service Properties Trust.
In an interview, Noble Senior Vice President of Investments Dustin Fisher said the Simply Suites portfolio deal "bolts into that strategy as a good way to add to that platform and scale. That’s really key when we’re trying to grow a platform that gets to a durable cash-flow yield where we can add operating alpha and generally get into good markets that have this depth of extended-stay generators.”
Hotel owners received a gift at the end of the year with the Federal Reserve lowering interest rates for the third time in 2025. The Federal Open Market Committee decreased the federal funds rate by 25 basis points in September, October and December.
“The combination of this lower interest rate and the compression of the bid-ask spread could signal that brokers will finally be correct with their annual announcements that ‘next year, transaction volume will be better,’” said Jan Freitag, national director of hospitality analytics at CoStar.
For a year with major macroeconomic uncertainty, rising geopolitical tensions and other significant headwinds, the U.S. hotel transaction market did well, all things considered.
Hopes started out high in January with a second Trump administration and the promise of a new tax bill. The U.S. Federal Reserve started cutting rates at the end of 2024 and indicated further cuts could happen this year if inflation continued to moderate. Renovation requirements were coming due, and more debt was reaching maturity deadlines.
So, what happened? The One Big Beautiful Bill Act became law in July, but it came after a flurry of tariffs raising the prices of imported goods and lowered inbound travel demand. The Fed cut rates another three times in 2025, but it took until September to start over concerns about the labor force while inflation remained sticky. Hotel owners did sell, but many found workarounds and were also able to refinance.
Even so, 2025 wasn’t a year without hotel deals. In fact, the available numbers show lots of similarities to previous years.
An overview
The third-quarter report from JLL Hotels & Hospitality shows that overall, U.S. hotel transactions over $5 billion excluding casinos year to date lined up mostly with 2024. Transactions dollar volume reached $9.7 billion in the first half of the year, mostly in line with 2024, but more deals closed in the first quarter of 2025 than in the second quarter, opposite of last year’s results. In the third quarter of 2025, dollar volume was about $6 billion, again in line with last year.
As in previous years, smaller hotels were responsible for a significant portion of the deals volume through the third quarter, with transactions of less than $50 million making up 44% of investment volume. Deals ranging between $50 million and $199 million made up 37%, while $200 million to $499 million made up 10% and $500 million-plus made up 9%.
The hotel industry came into 2025 with high expectations, said Kevin Davis, Americas CEO at JLL Hotels & Hospitality.
“When we were at conferences in the early part of the year, there was a lot of boundless optimism, I would say. And so, that resulted in a significant uptick in listings, and then we ran into the buzzsaw that was Liberation Day, which put, unfortunately, a temporary pause on the market,” Davis said.
Starting April 1 with all of the tariff announcements, there was a period of 60 to 90 days when investors “literally put their pencils down,” he said. While that took off a bit of the optimism, it was short-lived; once the furor settled down, investors started actively underwriting hotel deals.
The public equity markets started to run meaningfully, and there was a significant uptick in liquidity in the private markets, Davis said. The second half of 2025 has seen a stronger transaction market based on the deals JLL took to market which have received bids.
“We’re seeing the strongest amount of liquidity that we’ve seen at any point since 2022 since the Fed started raising interest rates, and that has continued to run into the fall as we start having conversations about taking deals to market in 2026,” he said.
Looking back to pre-pandemic years helps tell the current story, said Daniel Lesser, co-founder, president and CEO of LW Hospitality Advisors. His company tracks individual transactions of $10 million or more.
In 2017, there were 182 sales meeting this criteria with a total dollar volume of $13.6 billion and an average deal size of $75 million, according to his research. Total dollar volume reached $18.3 billion and $17.7 billion in 2018 and 2019, respectively, but unsurprisingly, that dropped to $5.3 billion and only 79 transactions in 2020 due to the pandemic.
That rebounded quickly in 2021 with total dollar volume of $36.2 billion and 308 transactions with an average deal size of $118 million. By the next year, though, the total volume dropped to $19.9 billion from 481 sales and an average deal size of $41 million. That trend continued through the following years, and preliminary 2025 numbers as of Dec. 22 show 333 individual transactions with a total dollar volume of $14.5 billion and an average deal size of $44 million.
The peak in 2021 was an anomaly with all the pent-up capital, and conditions have leveled out somewhat since then, Lesser said. By taking out some of the more extreme years, there’s a relatively tight range of dollar volume of $14 billion to $18 billion.
While the year didn’t go as hotel owners and investors initially hoped, it was not necessarily a down year for transactions, he said. Both the number of transactions this year so far and the average deal size is in line with the $41 million in 2022, $38 million in 2023 and $40 million in 2024.
“The sales volume is up there, but the average deal size has shrunk,” he said.
Deal drivers
Interest rates are down 150 basis points since the Fed started lowering rates in late 2024, Davis said. That has had a direct impact on the cost of debt. Most of JLL’s clients are floating-rate borrowers. The SOFR index, which most of its clients use for loans, has come in about 150 basis points since its peak.
The interest rate and credit spreads have compressed, so the interest rate environment and cost of debt environment are materially better today than 12 to 15 months ago, he said. That’s coupled with the fact that there’s so much capital sitting on the sidelines the past three to four years. Some investors have hotels they bought before the pandemic and need to trade because they need liquidity.
“We're seeing a lot of those investors come off the sidelines, both as sellers and buyers as a result of the passage of time,” he said.
Owners may have loans reaching maturity, so they’ll either have to refinance or sell, he said. Renovation requirements are also driving investors to sell because, in many cases, they’ve owned the property for a while and don’t want to invest further. In other cases, equity partners may have been invested for a long time are now demanding a repatriation of their capital.
There’s no shortage of debt or equity out there, Lesser said. It’s more expensive than it was three years ago, but interest rates have been ticking down.
The market is showing some price discovery now, and hotel owners are coming to the realization they may end up having to take some kind of hit to exit a transaction, he said. Whether it’s the end of a fund's life or a property improvement plan or refinancing is too expensive, all factors will spur hotel transaction activity.
The bid-ask spread is narrowing, and both sides are coming closer to each other, Lesser said. That happens during every cycle. Buyers know there may be more competition for deals now, and sellers are facing some kind of pressure to sell.
“Not everything is an unprofitable exit by any means,” he said. “Generally speaking, new supply is fairly in check.”
Construction money is out there, both debt and equity as well, but it’s for deals that make sense, Lesser said. The market is only going to get more active heading into the next couple of years, and while pricing is specific to the market, generally hotels are trading below replacement cost.
“That's also why new supply is fairly muted, because if you could buy below replacement cost, why are you going to build? It doesn't make any sense,” he said.
2026 outlook
The financing market should continue to improve, and buyers will see fundamentals bounce back after being a headwind in 2025, said Dan Peek, president Americas at JLL Hotels & Hospitality. Even with fundamentals as they are now, a buyer with a three- to five-year hold can acquire a property, refinance it and sell it into an expanding market at lower rates.
“So as a result, they get today's purchase metrics, and they can print a good profit over the next three to five years,” he said.
While he was unable to share any specific numbers about JLL’s deals pipeline, Peek said JLL has more deals it’s brokering that are both pending and on the market compared to the same time last year.
“In other words, deals that could either transact or likely come to market in the first half, that statistic is substantially higher than it was last year,” he said.
There’s a growing interest in global capital as well, Peek said. Investors from the Middle East and Europe are looking around more, starting with hotels in the U.S. gateway cities. More foreign capital should re-engage next year.
“There's a bit of an affinity for branded residential development or projects that have branded residential development, because they see a lot of that in their regions of the world,” he said.
As more capital comes off the sidelines and investors make more bids — which will likely happen more in the second half of 2026 — there will be more cap rate compression, Davis said. The current delta isn’t sustainable. There will be an initial rush for deals in the first half of the year, and cap rates will hold the line and rates will come in.
“But all of a sudden, people are going to get the memo that they’re able to buy at really attractive rates, and then you end up having a food fight in the bidding process,” he said. “And next thing you know, you’re incrementally seeing cap rates coming in 25 or 50 basis points.”
Major urban cores will continue to draw interest from buyers, Lesser said. These are the markets that took a little longer to recover after the pandemic. San Francisco is coming back, and New York, Chicago, Boston and Washington, D.C., are all potential targets for capital.
“These downtown urban cores are where — listen, at the end of the day, young people want to live in major urban areas. They don’t want to live in suburbia,” he said. “They don’t necessarily want to go to the office, that’s a different story, but they want to live in walkable urban cores, and that notion is not going away.”
Washington, D.C., for example, has had a tough year due to federal agency cuts and the government shutdown, but there’s not much new construction going on in the market and aside from the occasional shutdown, the federal government never goes out of business, Lesser said. The long-term view is that D.C. is as steady as any market assuming no dramatic, negative changes.
“I’m a big fan of urban markets,” he said. “That’s where I think the smart money goes. Again, it’s no different than San Francisco. To me, that is the poster child of it.”
An owner’s perspective
Real estate investment firm Gencom was busy evaluating deals all through 2025, closing on two major transactions. In March, it acquired the interconnected 528-key Ritz-Carlton New Orleans and 230-key Courtyard New Orleans French Quarter Iberville for $195 million. In early December, it bought the 607-key InterContinental New York Times Square for $230 million with partners Highgate and Argent Ventures.
From a hospitality standpoint, Gencom’s team feels positive about New York City, said Alessandro Colantonio, executive vice president and chief investment officer at Gencom. It bought the 587-room Thompson Central Park hotel in September 2024, making the InterContinental Times Square property its second in New York City.
“I didn’t think we would move this quickly to do more in New York, but it’s a market we continue to like,” he said. “We think there’s great long-term trends going on here: supply, demand, tourism numbers.”
When the deal opportunity arose, the Gencom team decided to jump on it, Colantonio said. It’s quality real estate at a good basis, and it opens a relationship with IHG Hotels & Resorts as it hasn’t worked with the brand company in the upper-upscale or luxury segments. Being able to partner with Highgate and Argent only added to the attractiveness of the deal.
In any given year, Gencom is probably signing about 75 to 100 confidentiality agreements on potential deals, Colantonio said. Most of those, the team can pre-screen quickly, determining which ones aren’t the right fit, the right asset class or the right market. Of those initial opportunities, roughly 20% make it to the next level to receive deeper due diligence. From that point, Gencom will usually end up closing on two to four deals out of that batch.
“It’s a low hit rate, but we want that by design,” he said. “More specific, more targeted. We are looking at everything because you obviously get a good all-around knowledge of the market as you’re looking at different opportunities. But, we want to be very targeted. We want to stick with our main focus, which is the upper-upscale/luxury segment and just try to stay disciplined.
“Although we love doing deals, you have to stay disciplined somewhere along the way,” he said.
Gencom has some possible deals lined up for the first quarter of 2026 that may come to the finish line, Colantonio said. Gencom executives hope to start the year the same as 2025, with some big closings, and continue to find deals through the rest of the year.
“We tend to be opportunistic regardless of the capital cycle,” he said. “There's always ways to either find distress or find opportunity if you really trust your team and trust your business plan.”
There was a period when there was a pretty wide gap between what buyers and sellers expected, Colantonio said. Much of that was the result of the cost of debt and capital, but as debt pricing has become more favorable to buyers, that gap has narrowed. As Gencom has evaluated and closed on deals, the pricing discussion has not been as challenging as it was over the past couple of years.
With every deal, the players get smarter about where they should price risk and how to focus on their business plan and the upside, he said. Gencom is getting better at quickly knowing where it can value a property and determine its best position.
What helps is that Gencom can close, and that’s part of why it has been so active, Colantonio said. It has a track record that brings certainty of execution, and that is a factor at play when putting numbers out and doing the due diligence. As much as sellers want a higher price, they want a buyer who can close so the deal doesn’t fall apart.
“The last thing you want is to pick the wrong buyer and go through a process, have a deal fall out, and you basically wasted three, three to six months,” he said.
Looking ahead, Gencom will continue to grow but in a targeted way, Colantonio said. The goal is to grow not just in terms of assets but also with capital partners, brand relationships and lender relationships. It will stick with the asset classes it knows, and it’ll still focus on quality real estate.
The company will continue to be active on the buy side and explore other jurisdictions, he said. Gencom is looking at the U.S., Europe, Latin America and the Caribbean to expand its presence or gain a foothold.
Along with new deals, Gencom will continue to reinvest in its own portfolio, he said, pointing to the company’s $110 million renovation of its Ritz-Carlton Key Biscayne in Miami.
“Aside from being aggressive on the buy side, we want to make sure we're taking care of our assets that are already in the portfolio,” he said. “I think that's another continued theme of where can we renovate, where can we reposition, and how can we continue to create value beyond just buy, buy, buy? That's pretty exciting, equally as exciting as looking for new opportunities.”
After a somewhat slower start to the year, the U.S. hotel industry saw several high-priced deals close in the last half of 2025, many of which were in or near the final months.
Many potential buyers this year were waiting for further clarity after a great deal of economic uncertainty clouded what had been an optimistic start in January.
See the slideshow below highlighting some of the biggest individual hotel deals in the U.S. in 2025 followed by a list of other big and noteworthy deals.
Noteworthy U.S. hotel deals
JW Marriott Phoenix Desert Ridge Resort & Spa
Price: $865 million
Price per square foot: $854.38
Where: Phoenix, Arizona
Rooms: 950
Buyer: Ryman Hospitality Partners
Seller: Trinity Investments and Elliott Management Corp.
Takeaway: The transaction included the JW Marriott Phoenix Desert Ridge Resort & Spa along with two golf courses at the Wildfire Golf Club.
Price per key: $433,835
Where: New York City
Rooms: 1,129
Owner: Magna Hospitality Group
Takeaway: Magna Hospitality sold a portfolio of four hotels: the 196-key Hilton Garden Inn New York Times Square North; the 374-key Motto by Hilton New York City Chelsea; the DoubleTree by Hilton New York Times Square South; and the Fairfield Inn & Suites New York Midtown Manhattan Penn Station. It was structured as a sale between Magna Hotel Fund VI and a group of unidentified large institutional owners along with a separate Manga fund that will maintain partial ownership of the portfolio.
PGA National Resort & Golf Courses
Price: $422.5 million
Price per square foot: $1,004.37
Where: Palm Beach Gardens, Florida
Rooms: 360
Buyer: Henderson Park, South Street Partners and Salamander Hospitality
Seller: Brookfield Hotel Properties
Takeaway: The deal included the PGA National Resort along with six surrounding golf courses with 99 holes of championship golf across about 807 acres. The price for the PGA National Resort itself was $171.4 million.
Park Hotels & Resorts’ San Francisco hotels
Price: $367.2 million
Price per key: $124,669
Where: San Francisco
Rooms: 2,945
Buyer: Conversant Capital and Newbond Holdings
Seller: Park Hotels & Resorts
Takeaway: In June 2023, Park Hotels & Resorts stopped making payments on the $725 million debt it held for the Parc 55 San Francisco and Hilton San Francisco Union Square, and the properties entered receivership in November 2023. This sale marks the closing of the two-year-long saga.
Sunseeker Resort & Golf Course
Price: $200 million
Price per square foot: $320.02
Where: Port Charlotte, Florida
Size: 624,960 square feet
Buyer: BRE Hotels & Resorts
Seller: Allegiant
Takeaway: BRE Hotels & Resorts bought the 785-key Sunseeker Resort Charlotte Harbor, now the Sunseeker Resort Florida Gulf Coast, Curio Collection by Hilton, and the accompanying Aileron Golf Club from airline company Allegiant.
Ritz-Carlton New Orleans and Courtyard New Orleans French Quarter
Price: $195 million
Price per key: $257,256
Where: New Orleans
Rooms: 758
Buyer: Gencom
Seller: Quorum Hotels & Resorts
Takeaway: Gencom bought the recently renovated interconnected 528-key Ritz-Carlton and 230-key Courtyard French Quarter in New Orleans.
Sawgrass Marriott Golf Resort & Spa
Price: $147.3 million
Price per key: $286,571
Where: Ponte Vedra Beach, Florida
Rooms: 514
Buyer: South Street Partners and Dream Finders
Seller: Brookfield Hotel Properties
Takeaway: The property sale included the Sawgrass Marriott Golf Resort & Spa as well as a restaurant.
Wildwood Snowmass and Viewline Resort Snowmass Autograph Collection
Price: $144 million
Price per key: $355,548
Where: Snowmass Village, Colorado
Rooms: 405
Buyer: Elevated Returns
Seller: High Street Real Estate Partners
Takeaway: Hodges Ward Elliot represented High Street Real Estate Partners in its sale of the 151-key Wildwood Snowmass and 254-key Viewline Resort Snowmass Autograph Collection.
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