Mergers & Acquisitions

🏡 CooperWynn Capital completed a loan modification for Hotel Indigo Detroit Downtown, featuring 241 rooms and 48 suites, plus amenities like a restaurant, a fitness center, and over 1,750 square feet of meeting space. The modification provides flexibility and improved financial performance amid lender uncertainty last fall. Located in downtown Detroit, the hotel offers skyline views and proximity to attractions like Ford Field and the Detroit Institute of the Arts.

🏨 IHG acquired the Ruby brand from Ruby SARL for €110.5m (~$116m) including the brand and intellectual property. Ruby, founded in 2013, has 20 hotels with 3,483 rooms across Europe and 10 more hotels with 2,235 rooms in the pipeline, set to open within three years. The Ruby brand aims for rapid global expansion, targeting over 120 hotels in 10 years and 250 in 20 years. The brand's net system size CAGR is 26% over the last five years. IHG paid an upfront fee of €109.9m and will pay €0.6m later, with franchise fees from the existing and pipeline hotels expected to be $8m in 2028 and more than $15m by 2030. IHG's integration of the 20 open Ruby hotels will begin in 2025 and should be completed by March 31, 2026, increasing its global system size by 0.3%, with the pipeline hotels adding another 0.2%. Integration costs for IHG are estimated at $10m in 2025, aiming for breakeven in 2026 and profitability thereafter.

🏦 On Feb. 19, 2025, DiamondRock Hospitality Company sold the 410-room Westin Washington, D.C. City Center for $92.0 million. The sale reflects an 11.2x multiple on 2024 hotel EBITDA, a 7.5% capitalization rate on 2024 hotel net operating income, or 5.6% inclusive of projected capital expenditures. CEO Jeffrey J. Donnelly emphasizes the sale as part of a strategy to boost long-term earnings and shareholder value.

🏨 Leonardo Hotels expands in Italy; acquired former Hotel dei Borgia, now Leonardo Boutique Hotel Rome Monti. NYX Hotel Rome to open in summer 2025 after renovations. Leonardo Boutique Hotel boasts 80 rooms, located near Colosseum and Fori Imperiali. Features include a breakfast area, two meeting rooms, and wellness facilities. Yoram Biton, Managing Director, highlights Italy as a key market for Leonardo Hotels Central Europe. The expansion reaffirms their investment strategy in Italy, with legal support from Tamar Cohen.

🏨 RevPAR reached a record $78 in 2024, a 14% increase over 2019. Demand surged by 232,000 room nights year-over-year, nearly recovering to 2019 levels. In 2025, room night demand for select-service and extended-stay properties is projected to hit 1.02 billion, a 16% increase above the 2001 average. GOP margins in 2020 for these hotels were 26%, 11 percentage points above full-service hotels. Between 2000 and 2024, the number of brands grew from 184 to 214, and branded hotel supply nearly doubled to 3.3 million rooms. In 2024, Oyo acquired G6 Hospitality for $525 million. The select-service and extended-stay sector attracted $62.6 billion in investments since 2021, with a 19% decrease in 2024 but still nearly half of the U.S. hotel investment volume. In 2024, the sector's average deal size was $17 million, and loan origination volume reached $18.2 billion, a 6.4% increase. The Federal Reserve began rate cuts in September 2024, which could spur a rebound in portfolio deals in 2025.