US Hotel CMBS Market Now Taking Bookings

Despite a general CRE market downtrend, US hotel CMBS originations are up 45% YoY, showing promising signs of growth.
May 19, 2024
hotel CMBS market growth
  • Q1 hotel CMBS originations reached $1.7B, exceeding last year’s volume.
  • Standout deals like Blackstone’s (BX) Great Wolf Lodge indicate investor confidence in the high-end hotel segment.
  • So far, Q2 has also seen notable deals, like the Hilton Orlando transaction, signaling ongoing interest.
Key Takeaways

Recent quarterly data revealed hotel CMBS market growth, highlighting opportunities for investors in the sector, according to CoStar.

Steady Growth in Originations

The commercial mortgage-backed securities (CMBS) market has slowed down compared to pre-pandemic levels. 

However, Q1 saw around $1.7B in hotel-related debt issuances, up 45% YoY. This indicates sustained interest from debt investors looking for higher coupon rates before potential Federal Reserve rate cuts. 

And despite a 1.5% drop from last year, the total hotel-related CMBS debt volume stands at $90B, which is still up 8.1% from pre-pandemic levels in 2019.

Notable Deals

Notable Q1 originations included Blackstone’s (BX) $1B CMBS offering for Great Wolf Lodge and MCR Hotels’ $268M loan securitization of a 16-property portfolio, showcasing investor confidence in the high-end hotel market.

Notably, these transactions not only refinanced existing debt, but also generated substantial net proceeds, indicating a positive momentum shift.

So far, Q2 has shown investors more of the same, like the Hilton Orlando and Swan & Dolphin Resort deals.

What’s Next?

This year’s sustained growth in hotel CMBS originations, up 45% from last year, is a breath of fresh air for the hospitality industry. Industry experts anticipate more headline-making CMBS deals this year, fueled by potential rate cuts. 

Not to mention more trophy asset transactions could lead to more securitizations, providing lucrative opportunities for borrowers and investors alike.

I’m an award-winning copywriter and digital marketing consultant who co-founded Tailored Ink. I help business owners and marketers craft the right messaging and create content at scale to grow their brands, generate leads, convert them into customers—and even get acquired by their competitors. As a member of Young Entrepreneur’s Council (YEC) and a columnist for sites like Forbes, Entrepreneur, and Business Insider, I also help mentor current and aspiring entrepreneurs and marketing professionals.
CRE Daily is a digital media company covering the business of commercial real estate. Our mission is to empower professionals with the knowledge they need to make smarter decisions and do more business.
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