Brasswater, led by Ian Quint, has paid a combined $48 million for two Hilton-branded Hampton Inns in Palm Beach County, according to The Real Deal. The 165-key Hampton Inn & Suites in Boynton Beach traded for $29.1 million, about $176,000 per key, and the 110-room Hampton Inn West Palm Beach Florida Turnpike sold for $18.9 million, about $171,800 per key. Both came from an entity tied to Hospitality Investors Trust, and both last changed hands in 2015.
What stands out to me is the split result. Same brand, same county, nearly the same price per key today. Yet the Boynton Beach hotel sold for less than the $29.9 million paid for it in 2015, while the West Palm Beach property went from $13.7 million to $18.9 million. Over ten years of ownership, one asset lost value in nominal terms and the other gained close to 40%.
The lesson is one we apply at EMC Acquisitions on every hotel and real estate deal we look at, across the markets where we invest: the return is mostly set on the day you buy. A seller who paid a full price at the top of a cycle can run a good hotel for a decade and still exit flat or down. A buyer who comes in at a sensible basis has room for things to go wrong.
For Brasswater, buying at roughly $172,000 to $176,000 per key in Palm Beach County looks like a reasonable basis for select-service hotels. I also read the deal as part of a wider trend: older portfolio owners are selling assets one or two at a time, and focused private buyers are picking them up. That is where I expect a lot of the hotel deal flow over the next year to come from.