CMBS office delinquency hit 12.34% in January 2026 and distressed sales surged to $4.3 billion last year. The conversion math at 40-60% below replacement cost looks compelling on paper, but the gap between "viable candidate" and "operating hotel" is where the real risk lives.
RLJ Lodging Trust posted a first quarter that made Wall Street happy, with AFFO beating estimates by six cents and RevPAR outpacing the industry by 100 basis points. But the number buried in the earnings call tells you more about where this cycle is heading than the headline ever will.
The Hyatt Regency Denver just wrapped a $70 million renovation on a convention center hotel owned by a quasi-governmental nonprofit, and the per-key math tells a very different story than the press release about "natural wood and stone materials."
A $70 million renovation of 1,100 rooms sounds like a standard luxury refresh until you check who's writing the check and what "return" means when the owner isn't chasing IRR.
National RevPAR jumped nearly 5% in mid-March, fueled by March Madness, spring break, and a physics conference in Denver. The question is whether your property rode the wave or watched it pass from the beach.
