With the spike in rates of interest subsiding and transactions growing towards the tip of 2025, the local weather for resort consumers and sellers appears promising going ahead. Within the dialogue that follows, brokers representing prime corporations overview the components behind this optimistic shift available in the market and the resort segments seeing essentially the most exercise. Members additionally focus on the significance of branding to resort valuation, vendor methods round timing and renovations, and what to think about earlier than revising the value on an inventory.
David Greenberg, Vice Chair for the Southeast Hospitality Funding Gross sales Group, Cushman & Wakefield
Teague Hunter, President and Chief Government Officer, Hunter Lodge Advisors
Ed James, Principal, Mumford Firm
2025 Transaction Tendencies
Ed James: Transaction quantity for mid-market and financial system accommodations started to sluggish within the second half of 2024 in anticipation of the presidential election and potential for uncertainty ensuing from it. That uncertainty did negatively impression the transaction marketplace for most of Q1 and Q2 of 2025. Exercise started to choose up considerably in Q3, and the ensuing reasonably upward pattern continued into the tip of 2025.
Teague Hunter: 2025 was a selective however productive yr. Industrywide deal quantity remained tempered, however certified consumers stayed lively, and capital continued to stream towards property with robust fundamentals. Whereas the broader market wasn’t chasing offers, good property nonetheless attracted good capital, and buyers centered extra on technique and positioning than value alone. … We noticed constant urge for food for prolonged keep, premium choose service, higher upscale, and way of life accommodations, particularly these with clear demand drivers and resilient working efficiency. Exercise was broad-based throughout markets, with power in each secondary and first cities the place fundamentals have recalibrated. Our Q3 alone illustrated that steadiness, with closings starting from AC San Diego Gaslamp to Crowne Plaza Knoxville and Hyatt Place Athens Downtown.
Ed James: Demand for mid-market accommodations and particularly extended-stay properties remained pretty robust via 2025, however the slowdown in exercise was primarily brought on by an absence of stock of properties on the market. Uncertainty within the financial system together with fewer choices for tax alternate candidates saved many sellers on the sidelines.
David Greenberg: A standard theme [of our 2025 hotel sales is] $25 million or much less. The sub $25 million class of accommodations tends to draw numerous personal capital, household places of work, regional gamers, somebody who’s traditionally owned procuring facilities and residence buildings, and so on. So, the personal capital house is totally alive and nicely. The institutional acquisitions departments are open for enterprise, however they’re much more selective.
Curiosity Charges Restabilizing
Teague Hunter: Charges continued to affect underwriting and the bid-ask unfold, however the impression softened as debt markets stabilized and charges started to ease. We noticed capital re-engage meaningfully within the second half of the yr, making a extra enticing transaction atmosphere even whereas consumers remained disciplined.
Ed James: The shock over rising rates of interest is not an element for a lot of consumers. Charges are actually comparatively steady, and few count on a return to COVID-era “free cash” with charges within the 4 % vary. Acquisition capital is available at present for fairly underwritten tasks.
David Greenberg: We’re in a downward-trending rate of interest atmosphere. It is dependent upon the placement, in fact, however primarily based on what we’re listening to from our fairness and debt structured finance workforce, we count on continued rate of interest cuts, and we ought to be at sub 7 % rates of interest.
2026 Transaction Outlook
Teague Hunter: We count on 2026 to carry continued momentum as confidence improves and capital searches for well-positioned alternatives. With extra readability round rates of interest and extra strategic consumers available in the market, the atmosphere seems primed for a more healthy, extra sustainable cycle—one the place fundamentals and execution matter greater than sheer quantity.
Ed James: We anticipate very modest progress within the tempo of transactions in 2026 as extra sellers discover their means again to market and the inevitable unwinding of unhealthy CMBS [commercial mortgage-backed securities] and standard debt begins in earnest. Property-level working leads to the mid-market and financial system sectors ought to stay flat or enhance solely barely in 2026.
David Greenberg: We’re very optimistic and optimistic when it comes to transactions as we head into 2026. For one, the rate of interest atmosphere is getting higher. And there was rather a lot much less development happening, particularly within the resort house. That’s one thing else that offers me encouragement as we head into 2026—it’s translating into making present accommodations that rather more priceless since you don’t have as a lot new provide coming on-line. After which economically, I really feel like we’re in a really upmarket proper now, and persons are feeling, for essentially the most half, optimistic about journey.
Branding, Valuation, and Financing
Ed James: Branding is likely one of the greatest (subsequent to location) components within the valuation of accommodations. The power to maintain an present franchise, to improve to a better flag, or be required to downgrade can have a huge effect on what a purchaser is keen to pay for an asset and ought to be an integral a part of pricing and advertising and marketing the resort. The stronger the model, the upper funding returns are anticipated and thus greater demand for the property.
Teague Hunter: We begin with fundamentals: market demand drivers, occupancy/charge penetration, and the power of the asset relative to its aggressive set. A model change solely provides worth if it creates actual income upside or strengthens purchaser demand. Our function is to assist house owners look past the model itself and perceive how model technique impacts long-term positioning.
David Greenberg: Financing-wise, it’s usually true that the lenders wish to see a flag on the property. With that stated, in any given yr, we’re promoting quite a lot of impartial accommodations—quite a lot of accommodations that aren’t affiliated with a nationwide franchise—and there are many lenders out there for these as nicely. However there are specific lenders that solely have a consolation stage if the property is affiliated with a nationwide franchise.
Timing Concerns for Sellers
Teague Hunter: The largest mistake is misreading the second—both dashing to market when efficiency hasn’t stabilized or holding too lengthy ready for situations to “peak.” At the moment’s buyers are strategic; they reply greatest when a vendor brings a transparent story on efficiency, upside, and timing, not simply pricing expectation.
Ed James: Attempting to time the market because it pertains to the calendar every year doesn’t have a lot of a “internet” impression to the vendor. In some vacation spot markets, nonetheless, comparable to seaside or college cities, it might be smart to plan advertising and marketing and gross sales schedules across the excessive season if that advantages the vendor. A great schedule to entice consumers to pay a better value could be to go to contract in December or January and shut in April or Could with the vendor having carried the property via the slower winter months, if that’s the case regionally.
David Greenberg: Again within the day, there was a seasonal time to carry a resort available on the market. However we’re in such a related world now—you may be in your African safari and nonetheless be in contact with David and workforce in america and behind your Hilton Backyard Inn [listing] in america. However I’ll say that once we do carry a resort available on the market, and operationally it’s in an upward-trending efficiency [phase], that makes for a extra marketable property
To Renovate or To not Renovate Pre-Sale
Ed James: Each choices can work; nonetheless, the choice ought to be primarily based on the objectives of the vendor. The next value could also be realized by renovating earlier than a sale; nonetheless, if, put up renovation, gross sales don’t enhance because of this, then that renovation may very well work towards a vendor. Cautious session with a “trusted resort advisor” about particular markets and the particular objectives of the vendor is at all times the perfect plan.
Teague Hunter: It comes down as to if the capex meaningfully adjustments your purchaser profile or the funding thesis. If a renovation unlocks demonstrable efficiency upside, it might justify the spend. Typically, nonetheless, particularly in at present’s strategic atmosphere, consumers desire to tackle the value-add themselves—permitting sellers to transact extra rapidly and letting the following proprietor seize the upside.
David Greenberg: I usually suppose it’s higher for a vendor to let the customer do the renovation. One in every of many causes is that if it’s a really vital renovation, it’s going to impression each day efficiency. And there’s an enormous focus positioned on the final three to 4 years of efficiency, with an uber-focus on the previous 12-24 months. So, we now have to clarify [to the potential buyer], “Sure, you’re noticing a downward pattern over the previous 12 to 24 months, however that’s as a result of the vendor simply executed on an $8 million renovation.” That rationalization holds weight, and a purchaser understands it, however it’s simply one thing else that must be [discussed] within the course of.
When to Drop the Value on a Itemizing
Ed James: Every scenario is completely different, and the perfect plan of motion ought to be decided by the specifics of the deal and the objectives of the vendor. Ought to a fast closing be a excessive precedence for the vendor, it might be greatest to low cost early; nonetheless, the other can be true if the vendor wants to realize a better value and is keen to attend for it.
Teague Hunter: If an asset is correctly priced and positioned, we count on robust engagement within the first 30-60 days. Past that, we reassess the story, pricing, or purchaser pool. At the moment’s market rewards strategic changes vs. reactive value cuts, however ready too lengthy can ship the incorrect message. A considerate analysis interval is at all times higher than chasing the market downward.
David Greenberg: We like to make sure we’re bringing at least six to seven provides within the first 60-90 days of selling, and if we’re not doing that, we’re determining why and [discuss] various things that we will be doing. We present the vendor that we’ve executed all this proactive advertising and marketing. And solely then we’ll have a dialog a few value discount, which many occasions will encourage extra exercise.
