US RevPAR growth weaker than expected; Stockbridge buys Fla. apartments

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US hotels' revenue per available room (RevPAR) is projected to grow 1.2% in 2024, weaker than the earlier estimate of 2.0%, as Americans take more frequent trips abroad and competition with other lodging alternatives intensifies, CBRE said in a report.

"While there is still demand for leisure travel, more Americans are vacationing in Europe and Central and Latin America and more frequently using cruise lines and short-term rentals, which continue to erode traditional hotels' market share," the real estate services company said.

RevPAR growth is expected to improve to 2.0% in the second half, from a tepid growth of 0.5% in the first six months of 2024, due to election-related and other special events, more inbound international travelers, and interest rate cuts.

Hotels in urban and airport locations are expected to outperform, while resort locations will continue to underperform as leisure travel normalizes, CBRE said.

CHART OF THE WEEK: US home prices hit another record high in July

⮞ US home prices climbed to another record high in July, with the S&P CoreLogic Case-Shiller US National Home Price NSA Index rising 5.0% year over year.

⮞ That growth was slower than the annual gain of 5.5% in June.

⮞ New York recorded the biggest annual increase among the 20 largest US cities, with an 8.8% rise.

PROPERTY DEALS

– An affiliate of Stockbridge Capital Group LLC sold The Quaye at Wellington, a 350-unit apartment building at 1090 Quaye Lake Circle in Wellington, Fla., to TDC FL Wellington LLC for $144.2 million, the South Florida Business Journal reported.

– The Continuum Co. made an offer to purchase the Four Winds condominium, a 12-story building at 9225 Collins Ave. in Miami, for $141 million, Commercial Observer reported.

– Diversified Healthcare Trust agreed to sell 18 triple-net leased senior living communities to Brookdale Senior Living Inc. for $135 million. The properties, totaling 876 units across 10 states, are leased by Brookdale.

– Crombie Real Estate Investment Trust entered into an agreement to acquire the remaining 50% of Zephyr, an apartment building at 1661 Davie St. in Vancouver, British Columbia, for $133 million from Westbank Corp. The deal is expected to close this month.

– Manulife US REIT is set to sell 400 Capitol Mall, a 29-story office tower in Sacramento, Calif., to 400 CM Owner LLC for $117 million, ConnectCRE reported. The property comprises 501,308 square feet.

US HOTEL PERFORMANCE

US hotel performance was up year over year across all three key metrics during the week ended Sept. 28, STR reported, citing data from CoStar, which provides information and analytics on property markets.

RevPAR was $116.50, up 10.2% from the comparable week in 2023, while occupancy rose 2.6% to 68.4%. Average daily rate (ADR) increased 7.5% year over year to $170.24.

Among the top 25 markets, New York City reported the biggest year-over-year gain in all three metrics, while San Francisco and Nashville logged the steepest drop in RevPAR.

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REIT Replay: REIT share prices dip during week ended Sept. 27