Royal Sonesta Sells for $6.8 Million in Downtown
The property sale marks a 94% decrease from its 2016 price as downtown commercial hotel valuations continue to shift.
Updated on Oct. 28, 2026 in Commercial
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Downtown Portland's hospitality sector saw another major asset trade hands in October 2026, as the Royal Sonesta at 506 S.W. Washington St. sold for $6.8 million. This transaction is part of an eight-property package acquired by Laxmi Hotels Group.
Why it matters
The sale highlights the ongoing shift in valuation for downtown commercial properties, marking a 94% price decline for the site compared to its 2016 sale price. Whether this pattern of steep valuation drops for central business district hotels will stabilize remains a key question for the local market.
The Royal Sonesta sold for $6.8 million, a 94% decrease from its $108.3 million price tag in 2016. This follows other significant sales, including the Hotel Zags for $10 million and the Portland Marriott Downtown Waterfront for $30.1 million, both recorded in 2026.
The players
Laxmi Hotels Group
The investment group that acquired the Royal Sonesta as part of an eight-property portfolio purchase.
Service Properties Trust
The firm linked to the seller of the Royal Sonesta property.
The details
Laxmi Hotels Group acquired the hotel as part of an eight-property transaction involving a limited liability company tied to Service Properties Trust. The sale reflects a broader trend of diminished valuations for downtown Portland hotel assets, a pattern observers expect to persist as commercial property owners adjust to the current market climate. The transaction follows recent sales like the Heathman Hotel, which traded for $45 million in 2023.
Timeline
2016: The Royal Sonesta sold for $108.3 million.
2023: The Heathman Hotel sold for $45 million.
Early 2026: The Portland Marriott Downtown Waterfront sold.
October 2026: The Royal Sonesta and Hotel Zags were sold.
Beyond the Bridges
The sale of the Royal Sonesta follows the pattern of price reductions established by the 2023 sale of the Heathman Hotel, marking a continued decline in downtown hotel valuations. This trend indicates a persistent shift in how investors are valuing large-scale hospitality assets in the city center.
While this sale is a transaction between investment groups, it underscores the changing economic footprint of the downtown core for residents who work or visit the area. Observers should continue to track vacancy rates and property turnover near the West End as these ownership shifts influence long-term neighborhood revitalization efforts.
The takeaway
The Royal Sonesta sale serves as a benchmark for the current valuation of downtown Portland real estate compared to historical highs. Keep an eye on the performance of other major downtown hotel properties in the coming year to gauge if market prices are beginning to find a new floor.
Further reading
For more on the changing landscape of local business investments, see our Commercial section.
Source note: This article includes information reported by Oregon Live.
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