“We’ve never had anything like it”: Certificates show Davenport hotels in Spokane have sold for more than $ 200 million
A Colorado-based privately owned corporation has paid more than $ 200 million for Walt Worthy’s six downtown hotel properties, including the historic Davenport and the new Davenport Grand.
The sale price is almost double that of the five hotels and the parking garage west of Davenport Tower for tax year 2022, said Tom Konis, appraiser for Spokane County.
“We have never had anything like it,” he said on Tuesday.
KSL Partners and the Worthys announced the sale earlier this month but did not disclose the total price. The sales deeds received from the district auditor represent the amount paid for the property and may not reflect any other payments KSL has made, including for property or trademarks, Konis said.
Dave Black, chief executive officer and director at NAI Black, said it was likely that the total sales price for the hotels was at least twice that of the county.
“I would guess this is possibly the biggest deal ever made in Spokane,” said Black, who was not involved in the sale of the Davenport properties.
The sale price would likely also include personal property in the hotels and what is known as “goodwill” in the commercial real estate market, which includes things like a company’s brand name, reputation and future sales, Black said. KSL has announced that it will keep the Davenport name in Spokane hotels and retain all of the hotel group’s employees.
Other comparable real estate transactions in the Inland Northwest suggest the Davenport sale would be one of the largest. Worthy himself sold his Rock Pointe complex in 2005 for $ 82.8 million. Four years ago, Tacoma-based healthcare giant MultiCare bought Rockwood Health Clinic, Deaconess and Valley hospitals for $ 425 million.
Of the properties acquired by KSL Partners as part of the Davenport transaction, the Davenport Grand was the most expensive, priced at $ 78.1 million. For the Historic Davenport, the site of the Worthys’ first hotel purchase more than two decades ago, KSL paid $ 45.2 million, a premium more than double the hotel’s estimated value that year, 21, $ 2 million.
Hotel property values are based in part on market forces, Konis said, noting that his office adjusts ratings based on available data. Some hotels report their income, others don’t.
The COVID-19 pandemic has hit the hospitality industry hard, closing four of the five hotel properties the Worthys owned for several weeks in 2020. As a result, many of their hotels fell in value, as did other Spokane properties. On average, Spokane County’s hotels lost around 25% of their property value in 2021, Konis said.
The Davenport sale will likely result in appraisers adjusting property values in the opposite direction, Konis said.
“There’s no such thing as a good manual,” he added.
The workforce in the local hotels is also struggling to reach the prepandemic level despite the overall low unemployment in the district. According to the latest estimates from the Washington Employment Security Department, hospitality jobs not related to bars and restaurants are still 32% down from 2019.
That category includes mostly hotel workers, said Anthony Anton, president of the Washington Hospitality Association.
“I think it’s great for people who have made careers in the Spokane hospitality industry,” Anton said of the sale. “It also speaks for the work of these people. You have a buyer who says we believe in what you do and keep doing it. “
Anton also said the Worthys deserve a lot of credit for building “a great local brand”.
Black said the sale would likely bolster an already busy commercial real estate market in Spokane. NAI Black just had a better year than 2019, he said, an indication that the city is ripe for growth should the pandemic come to an end.
“I think that’s just a trend,” he said. “The real estate markets are hot, everyone.”