The most expensive hotel sale in the North Bay through June 30 was the 27-room Redwood Inn & Trailer Park in Santa Rosa. It sold for $2.625 million, according to Atlas Hospitality Group.
CHERYL SARFATY | NORTH BAY BUSINESS JOURNAL | August 14, 2025
Hotel sales in California through the first six months of the year showed no signs of overcoming the strain of the nation’s economic pressures, according to a new industry report.
As of June 30, individual hotel sales volume in the state was down year over year by 7.4%, and the median price per room was down 2.5%, according to Atlas Hospitality Group, a Newport Beach-based real estate brokerage.
The firm recently released its midyear California hotel sales survey on the heels of its hotel development survey, which the Business Journal reported July 23. Atlas also produces year-end surveys in both hotel categories.
“We continue to see a disconnect between buyer and seller expectations,” said Alan X. Reay, president of Atlas. “The higher interest rates combined with increased operating costs, especially in labor and insurance, is dampening sales activity.”
That is certainly evident in the North Bay.
Six months into 2025, three hotels were sold compared to 13 a year earlier, according to Atlas.
Two of the sales were in Sonoma County, the other in Lake County. There were no hotel sales throughout the rest of the North Bay region (Marin, Napa, Solano and Mendocino counties).
Sonoma County had the most expensive transaction in the first six months of 2025. The 27-room Redwood Inn & Trailer Park in Santa Rosa sold for $2.625 million, according to Atlas.
The second-biggest sale was in Lake County. The 17-room Tallman Hotel in Upper Lake sold for $1.750 million, Atlas reported.
Sonoma County’s additional hotel sale transaction had nostalgia attached to the price tag.
The Union Hotel in Occidental and the adjoining Union Motel, a third-generation family enterprise dating back to 1926, were put up for sale on June 26, 2024, the Press Democrat reported at the time.
The 13-room motel part of the family holdings sold for $650,000, according to Atlas and Journal research. The hotel is still for sale, listed by North Bay Commercial Real Estate for $2.65 million.
“This decision wasn’t taken lightly,” Barbara Gonnella, now-former co-owner, told the Press Democrat in its June 21, 2024, article.
Passing the property to a fourth generation was not in the cards, she said, so it was time to make a choice for “the next hundred years.”
Barbara Gonnella owned the Occidental property with her husband, Frank Gonnella.
Sign of the times
“We are seeing an increase in notices of default and foreclosures in certain markets, which is putting additional downward pressure on sales prices,” Reay stated.
He added, “It is interesting to note that the largest hotel sale in three counties (Los Angeles, Alameda and Santa Clara) were all lender foreclosure sales.”
In Los Angeles County, the 397-room Line Hotel located in the heart of Koreatown sold for $68 million, according to Atlas.
The $70.18 million foreclosure sale in Alameda County was for the 500-room Marriott City Center hotel in Oakland, the report showed.
And in Santa Clara County, $80 million was the price tag for the foreclosure sale of the 541-room Signia Hotel in San Jose, according to Atlas.
“These three sales accounted for a total of $218.18 million of sales volume, which is 15.7% of the entire dollar volume through the first six months of 2025,” Reay said.