Atlas in the news
Residence Inn sells for $28M in East Bay
Transaction aligns with declining hotel room values San Francisco / September 16, 2022 08:30 AMBy Pawan Naidu | Research By Christian Bautista and Caysey Welton Hotels aren’t worth what they used to be, but they’re still worth a lot. A Residence Inn hotel in an East Bay suburb sold for $28.5 million, or $226,000 per room, according to public records. Despite the somewhat sizable transaction, the buyer and seller have been mostly flying under the radar in California real estate. The seller was real estate investor Rao Yalamanchili, who’s been busy this year in the residential sector, adding $68 million to his portfolio with the acquisition of three properties. The buyer is listed as Los Angeles-based Five Rivers Hospitality LLC. A thorough search yields very limited information on the entity. It was registered as an LLC by Jagpreet Sandhu in February of this year, according to California state records. Residence Inn by Marriott Pleasant Hill Concord is located at 700 Ellinwood Way in Pleasant Hill and has 126-units. The 50,700 square-foot hotel was built in 1991. Yalamanchili purchased it three years ago for $25.3 million. The Residence Inn–which operates under the Marriott brand umbrella–sold for less than a recent traditional hotel transaction in the bay area when Pebblebrook Hotel Trust sold…
Bay Area hotel purchases slump amid inflation, price uncertainty
Hotel purchases show weakness during first half of 2022 By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group PUBLISHED: September 12, 2022 at 1:30 p.m. | UPDATED: September 13, 2022 at 4:56 a.m. The Bay Area market for hotel purchases slumped during the first half of 2022 compared to the same period the year before amid inflation woes and fast-rising interest rates. The total dollar volume for hotels bought in the nine-county Bay Area was $660.5 million, according to research Atlas Hospitality Group provided to this news organization. That was down 66.8% from the $1.99 billion in hotel purchases during the first six months of 2021, the Atlas Hospitality research showed. “Interest rates and inflation are increasing, which makes it harder to complete deals,” said Alan Reay, president of Atlas Hospitality, which tracks the California lodging market. The challenges have arisen despite the easing of COVID pandemic restrictions and a corresponding increase in the number of people traveling. But the hotel market is not alone — rising interest rates and inflation have also plagued the state’s housing and office markets, as well, causing some would-be buyers to reconsider. It appears that the Bay Area hotel market is considerably weaker than the lodging sector statewide. During the…
Analysts Make Case for Optimism on Hotel Performance for Rest of Year (skift.com)
Sean O’Neill, Skift September 9th, 2022 at 2:00 AM EDT Skift Take Talk of inflation has soured some people on the prospects for hotels for the rest of the year. But some analysts, such as CBRE and Truist, have upgraded their views. Plus, Asia’s recovery and other news items. — Sean O’Neill Sunday, Sept. 4 After a record-breaking 2021 for hotel sales in California, hotel transactions have cooled off in the state in the first six months of this year, reported the San Diego Business Journal, citing data from Atlas Hospitality Group. The number of individual hotel sales declined by 9.9 percent and total dollar volume is down 33.6 percent thus far in 2022, according to Atlas. The median price per room has increased by 12.7 percent statewide, year-over-year, to a new California record of $143,443. Skift Note: The Atlas Hospitality Group data dovetails with reports from Lodging Econometrics and others showing an overall U.S. slowdown in hotel construction and development in 2022 from the momentum of January.
After Slowdown in Property Sales, ‘Repricing’ Becomes This Summer’s Dreaded Word
Rising Interest Rates, Other Economic Challenges Plague Commercial Real Estate Nationally Waterbridge Capital struck a deal to buy Union Bank Plaza in Los Angeles for $155 million after another buyer backed off a higher-priced acquisition of the 40-story office tower amid rising interest rates. (Jeremiah Unruh/CoStar) By Ryan Ori | CoStar NewsAugust 23, 2022 | 10:53 AM Summer lulls are nothing new in commercial real estate, but this year’s slowdown in deals is more pronounced because of one word that has defined the season: repricing. Rising interest rates, inflation and worries of a recession have caused a reset on prices, prompting sellers to accept a less satisfying price or pull properties from the market in hopes of a better offer later. The result has been a drop in deals this spring and summer, with no clear timeline for when the market will recover. “The lender pool isn’t as deep, the buyer pool isn’t as deep and everyone’s being cautious about making a move,” said Jim Postweiler, a Newmark broker who sells office buildings in the Chicago area and throughout the Midwest. U.S. transaction volume fell in all three months of the second quarter after the Federal Reserve began raising interest rates,…
Atlas Report Shines Spotlight on Hotel Sales in California
HOSPITALITY: Hotel Transactions Cooling Off in 2022 BY KAREN PEARLMAN | SEPTEMBER 2, 2022 After a record-breaking 2021 for hotel sales in California, including the highest number of individual hotel sales and total dollar volume sales in San Diego County, hotel transactions have cooled off in the state and region in the first six months of this year. Statewide, the number of individual hotel sales declined by 9.9% and total dollar volume is down 33.6% thus far in 2022, according to Irvine-based Atlas Hospitality Group, which keeps tabs on hotel transactions in California. Those numbers are part of Atlas Hospitality Group’s 2022 mid-year California Hotel Sales Survey released late this summer. In San Diego, 25 hotels were sold in the first six months of 2022, compared to 28 sold in the same time frame of 2021, a decline of about 11 percent. The most expensive local hotel sale of 2022 as reported by Atlas was the 126-room Moxy Hotel in downtown San Diego at $46 million; next highest was the 90-room Inn at Rancho Santa Fe at $42.7 million; and third most expensive was the 90-room Courtyard San Diego Gaslamp/Convention Center at $41 million. Alan X. Reay, president of Atlas Hospitality…
California hotel buyers’ price per room goes up, deals down
Focus shifts to luxury properties even as cost for capital climbs Los Angeles Archive / August 18, 2022 02:30 PMBy Isabella Farr If you’re looking to buy a hotel in California, expect to pay a record median price per room. The median price for a hotel per room hit $143,400 in the first half of this year — up 13 percent compared to the same period in 2021, according to a report from hospitality brokerage firm Atlas Hospitality Group. But overall sales have declined. In the first six months of the year, 263 hotels in California traded hands, compared to almost 300 that sold in the first half of 2021, according to the report. Investors have poured a total of $3.5 billion into hotels so far this year — down 33 percent from the same period last year. The slowdown is expected to continue through the second half of the year, as rising interest rates start to affect deals. “There is still high buyer demand, but the prices they can afford to pay today are different from what they were six months ago,” Atlas Hospitality CEO Alan Reay said. “That’s because of the cost of capital.” Reay said he’s already seeing some deals for hotels…
California hotel sales reach record price per room — but not in San Diego
The Moxy hotel was the priciest sale in San Diego County during the first six months of 2022 (Courtesy of CoStar) The priciest hotel sale in San Diego County during the first six months of the year was the 126-room Moxy, a hip boutique hotel by Marriott. BY LORI WEISBERG AUG. 18, 2022 4:24 PM PT Even as the pace of hotel sales slowed across the state the first half of the year, California still hit a new record high for the price paid per room. San Diego, though, was an exception. It saw a nearly 12 percent decline. Atlas Hospitality Group, the Orange County brokerage that tracks hotel transactions statewide, cautioned that six months isn’t necessarily a complete picture of what’s ahead for California’s hotel real estate market. Atlas President Alan Reay is predicting that transactions will decline significantly during the remainder of the year as rising interest rates and uncertainty about the economy dampen owners’ interest in parting with their properties. In San Diego County, 25 hotels traded hands in the first half of this year, compared with 28 a year earlier, a decline of nearly 11 percent, says Atlas in its newly released mid-year sales report. But when measured…
Though Slower-Paced, California Hotel Sales Set New Record for Median Price Per Room
State Program, Investors Continue To Seek Hotels To Convert to Housing The 295-room Fashion Island Hotel Newport Beach, set to become a Pendry Hotel in 2023, was California’s highest-priced deal in the first half of 2022 with a $145 million leasehold sale. (CoStar) By Bryan Wroten | Hotel News NowAugust 16, 2022 | 1:30 P.M. While hotel sales in California cooled from their highs last year, transactions during the first half of 2022 set a new median-price-per-room record and approached other records as well. Atlas Hospitality Group’s California Hotel Sales Survey 2022 Mid-Year reports that the state had 263 individual sales during the first half of the year, down 9.9% from the first part of 2021. Total dollar volume reached $3.49 billion, a 33.59% year-over-year decrease. However, the state achieved a new record in median price per key at $143,443, a 12.7% year-over-year increase. Los Angeles County led with the highest number of hotel deals with 36. The deal with the highest price per room was Orange County’s 295-room Fashion Island Hotel Newport Beach, which will become a Pendry Hotel, in a $145 million leasehold sale that breaks down to about $491,525 per room. “The sales have cooled off a little…
Downtown San Diego’s Hotel Palomar is getting a $25M makeover — and a new name
The hotel that began life 14 years ago as a tony downtown property and later was reinvented as the Hotel Palomar will now be reimagined yet again — as the Kimpton Alma, with a new design, new branding and a change in dining venues. The renovation is expected to be complete by this fall. BY LORI WEISBERG AUG. 12, 2022 6:13 PM PT More than a decade after transitioning to a new name and brand, the Hotel Palomar in downtown San Diego is preparing for yet another identity change. Meet the new Kimpton Alma. Managed by Kimpton Hotels and Restaurants, the 211-room hotel is in the midst of a major redesign that is expected to cost $25 million, said Nick Gregory, senior vice president of hotel operations for Kimpton. That investment, he said, will go toward a “comprehensive transformation” of the Fifth Avenue property, including a refresh of all guestrooms and suites, new restaurants and kitchens, a more inviting pool area, and updated meeting spaces. The lobby also is being reimagined to make it more airy and light-filled but to also give it an indoor-outdoor feel, with large sliding doors that open out to the sidewalk. “If you think about it, it’s…
Vacation inflation: California sees big jump in hotel room rates
Occupancy runs 75%, up 6 percentage points over 12 months By JONATHAN LANSNER | jlansner@scng.com | Orange County RegisterPUBLISHED: August 13, 2022 at 7:24 a.m. | UPDATED: September 1, 2022 at 10:35 a.m. ”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data. Buzz: Hotel room rates are heating up this summer in many places across California. Source: My trusty spreadsheet reviewed one-year changes in hotel room rates and occupancy levels for 2022’s first half in 19 markets, compiled by Visit California. Topline The urge to get out of the house helped push California’s average hotel room rate up 25% to $200 a night in 2022’s first six months. Travelers didn’t seem to mind, with occupancy at 75%, up 6 percentage points over 12 months. That’s a slightly bigger bump than what hotels nationwide saw — a 19% jump in rates to $155 as occupancy ran 70%, up 4 points. Details So where did visitors see the biggest rate jumps within California? Mostly in markets on a pandemic rebound. Largely, that meant coastal and urban sites once shunned in the height of 2021’s pandemic business limitations. Or it was in places where local…
Biotech-Focused IQHQ Buys San Diego Hyatt Regency in Rare Hospitality Acquisition
Biotech-Focused IQHQ Buys San Diego Hyatt Regency in Rare Hospitality Acquisition (costar.com) Deal Comes After Growing Life Science REIT’s $200 Million Office Purchase in Same Mixed-Use Complex IQHQ acquired the Hyatt Regency in San Diego’s UTC neighborhood for more than $216 million. The hotel is next door to an office building, at left, purchased in October 2021 by the biotech-focused REIT. (CoStar) By Lou Hirsh | CoStar NewsAugust 10, 2022 | 1:02 P.M. Biotech-focused IQHQ has made a rare hospitality purchase, acquiring the upscale Hyatt Regency La Jolla at Aventine hotel in San Diego for more than $216 million as the developer looks to expand its pipeline of properties targeted for high-demand life science space nationwide. Public loan and title filings show San Diego-based IQHQ this month closed escrow on the purchase of the 416-room Hyatt Regency, built in 1989 at 3777 La Jolla Village Drive in the city’s University Town Center neighborhood. The property was purchased for approximately $216.3 million from Singapore-based GAW Capital Partners. IQHQ also purchased the roughly 22,000-square-foot Aventine Atrium building next to the hotel at 8930 La Jolla Village Drive from GAW for approximately $11 million, according to public data. In October, IQHQ purchased the 11-story Aventine Office Building, next door to…
Billionaire Mulls $650M Montage Laguna Beach Purchase: Report
The Montage Laguna Beach luxury resort may be getting a new owner in the near future. Patch.com – Posted Fri, Nov 4, 2022 at 10:39 am PT LAGUNA BEACH, CA — Montage Laguna Beach may come under new ownership in the future, after the Wall Street Journal reported a possible sale of the luxury resort this week. LAGUNA BEACH, CA — Montage Laguna Beach may come under new ownership in the future, after the Wall Street Journal reported a possible sale of the luxury resort this week. Billionaire Tilman Fertitta is close to buying the 250-room ocean-view hotel in coastal Orange County for roughly $650 million, the Orange County Register reported. Fertitta owns hotels across the country, including multiple Golden Nugget casinos and the luxury Post Oak Hotel in Houston. He also owns pro basketball’s Houston Rockets, and he has a 6.2 percent stake in Wynn Resorts Ltd., the operator of hotels and casinos in Las Vegas and Macau, the report said. The seller of Montage Laguna Beach is China’s Dajia Insurance Group Co., and a representative for the company did not respond to the Orange County Register’s request for comment. If the $650 million price tag is correct, the luxury…
