Abstract
The Mid-Atlantic lodging transaction market closed 2025 on steady but unspectacular footing. With 168 hotels sold across Maryland, Virginia, and North Carolina representing $1.28 billion in total volume, transaction activity held relatively flat compared to the prior year — though still well below the peak years of 2019, 2021, and 2022. The market’s primary constraint was not demand, but motivation: owners of quality assets had little incentive to sell in an interest rate environment that compressed valuations, leaving the transaction pool dominated by lower-tier suburban, airport, and interstate properties. Of more than 170 sales recorded in the region including Washington, DC, fewer than 25 exceeded $100,000 per key.
Despite the muted volume, the underlying operating fundamentals told a more constructive story. Occupancy and ADR held essentially flat year over year, reflecting stable demand across the region’s hotel base. The challenge was that hotels which did trade carried RevPAR $16 below the regional average, reinforcing the pattern of commodity assets changing hands while institutional-quality properties stayed off market. Average price per key came in at $78,000, trending down for the fifth consecutive year, a signal of the asset mix driving transactions rather than any fundamental deterioration in market value.
Looking ahead to 2026, Commonwealth expects a meaningful uptick in transaction activity as the conditions that suppressed motivated selling begin to shift. Investors seeking to recycle capital, owner-operators looking to level up their portfolios, and a more favorable interest rate environment for buyers are all converging to create conditions for increased deal flow. For owners of well-located, franchise-affiliated assets, the window to bring quality product to a supply-constrained market may be opening.
