Hotel Deal Near Phoenix Among Region’s Largest of Past Year

Article originally posted on CoStar on August 10, 2023

The sale of a DoubleTree hotel near Phoenix for about $115.5 million is the region’s second-largest hospitality deal of the past year amid strong tourism and business travel demand.

Los Angeles-based Global Hospitality Investment Group announced it acquired the 378-room DoubleTree Resort Paradise Valley Scottsdale, on 23 acres at 5401 N. Scottsdale Road in the upscale Phoenix suburb of Paradise Valley near Scottsdale, Arizona. The seller was San Diego-based investment firm Southwest Value Partners, according to CoStar data and public filings.

The property was built in 1984 and renovated in 2006. Southwest Value Partners acquired it for approximately $95 million in January 2020, public filings showed.

A Global Hospitality statement said the property is in a central location within “one of the highest-growth, dynamic lodging and hospitality markets in the United States.” The buyer said the property would remain under the DoubleTree by Hilton brand.

Global Hospitality plans renovations to the property, which currently includes four dining venues, two outdoor pools, indoor and outdoor meeting spaces and a palm-lined fountain courtyard. CEO Kevin Colket said the purchase “exemplifies our strategy of acquiring high-quality, irreplaceable assets in markets with strong demographic tailwinds and favorable supply and demand dynamics.”

The property is in Phoenix’s upscale Scottsdale area, traditionally among the region’s strongest hotel performers based on leisure and group business demand.

CoStar data as of Aug. 7 showed the Scottsdale area’s 12-month average daily rates and revenue per available room reached historic peaks earlier this year as the Phoenix region hosted the NFL’s Super Bowl and visitors returned for Major League Baseball’s annual spring training season.

“Like national trends, occupancy is still lagging, but in Scottsdale, it is more due to hotel inventory additions versus lagging demand,” Emmy Hise, CoStar’s senior director of hospitality analytics, said in a recent market report. “Hotel occupancy is forecast to fully recover in 2025.”

Scottsdale’s hotel occupancy for the past 12 months was 65.4%, below historical averages but 4.8% higher than a year earlier. The Scottsdale area saw the Phoenix region’s largest hotel property sales volume of the past year at $518 million and its highest average per-room sales price at $464,000, according to CoStar data.