🚨Good morning,
The 607-key InterContinental New York Times Square is under contract at about $230M (~$379K/key) to a Highgate/Gencom JV. NYC’s summer occupancy topped ~84% with RevPAR ~ $220, far outpacing the U.S., as financing conditions eased after the Fed’s September cut. The price implies a mid-5s cap on in-place NOI and sits below luxury replacement cost, with lenders open for prime gateway assets.
📊 Quick Dive
Performance gap: NYC ~85% vs U.S. ~68% July occupancy (see chart on p.3). Pricing power is concentrated in top gateways.
Capital stack context: Prior $190M (2018) refi vs $230M (2025) sale underscores moderate value growth (+21%).
Underwriting guardrails: Model mid-80s% stabilized occ, ADR baseline ~$260, 55–65% LTV, and PIP reserves; stress exit cap +50 bps.
Columbia Sussex buys Hilton Daytona Beach; “massive” renovation ahead.
The 744-room oceanfront flagship changes hands with plans to modernize while keeping the Hilton flag. Local metrics are soft—July occupancy 64.7% (–5.8% YoY), RevPAR $93.49 (–3.7%)—creating a basis to buy and reposition. Expect $30–40M+ in CapEx (benchmark: $25M in 2019), phased downtime (10–20% keys), and underwriting at high-single-digit exit caps given leisure volatility. Debt likely 50–60% LTV at SOFR +300–400 bps with interest reserves. (Charts on p.7 outline Daytona vs Florida/U.S.)
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JPMorgan funds $417M construction loan for Four Seasons Telluride
A rare $417M big-bank bet on luxury resort mixed-use (hotel + branded residences) confirms liquidity for blue-chip sponsors even with the 10-yr ~4.1% backdrop. Underwrite longer schedules, 10–15% hard-cost contingencies, phased condo absorption (e.g., ~50% by delivery), and robust TRevPAR from spa/F&B/events. Expect ≤60–65% LTC, strong guarantees, staged draws, and interest-carry cushions. (Rate trend and mountain-market volatility charts on pp.11–12.)
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Las Vegas cuts rates/fees as visitation slumps
Through July, visitor volume –8% YTD, occupancy 76.1% (–7.6 pp), ADR ~$155 (–3.4%), and RevPAR –8.5%. Operators are waiving $35–$55 resort fees and running flash sales to defend share. Model mid-70s% occ near term, higher expense ratios (lost fees/marketing), 9–10% exit caps for risk, and lender covenants/reserves. (Performance table on p.16.)
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STR: Post-Labor Day dip; NYC still outperforms
For the week ending Sept 13, U.S. RevPAR –1.7% YoY, occ 65.4% (–1.8 pts), ADR $162.71 (flat)—the 19th weekly RevPAR decline of 2025. NYC hit mid-80s% occ on events (U.S. Open, major concert), while Anaheim 70.6% (RevPAR –24.2%) and D.C. 67.8% (RevPAR –18.3%) lagged on tough comps. Temper 2025 RevPAR to flat/low-single-digit; differentiate by market. (Weekly KPI tables on p.21.)
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NYC’s trade is the tell: core, scale, and brand are clearing with bankable debt; non-core leisure needs basis and a crisp business plan. For operators and lenders, underwriting now favors granular market selection, realistic occupancy ceilings (mid-60s U.S., mid-80s NYC), and baked-in PIPs/CapEx rather than growth stories. If you’re buying: lock financing while spreads are friendly on A-quality deals; elsewhere, demand discounts, interest reserves, and cash sweep triggers to bridge a choppy 6–12 months.
Rates: Fed easing improves term sheets first for gateway, luxury, and sponsor-strong files; watch for cap-rate compression in Q4–Q1 on marquee trades.
Seasonality: Expect conference bumps late Sept/early Oct; monitor if ADR holds with occupancy. (See STR weekly cadence.)
Leisure bifurcation: Vegas promo cycle continues into year-end; Daytona’s reno-thesis hinges on winter pacing and group recovery.
Luxury development: Track Four Seasons Telluride pre-sales %, draw cadence, and winter mobilization—bellwethers for big-ticket resort finance.
This gap highlights why gateway cities like New York are clearing trades while secondary markets need deeper discounts and stronger value-add theses.
