Atlas in the news

‘We are forecasting a big decline,” says Atlas Hospitality By JONATHAN LANSNER | jlansner@scng.com | Orange County Register PUBLISHED: August 1, 2023 at 11:01 a.m. | UPDATED: August 2, 2023 at 8:32 a.m. “Crash, correction or chill” looks at economic and real estate trends that offer hints about the depth of housing’s troubles. Buzz: Building new hotels in California is no longer a popular endeavor, with openings cut nearly in half. Source: My trusty spreadsheet reviewed Atlas Hospitality Group’s mid-year hotel construction reports dating to 2018. Topline First, ponder the words from the industry analysts at Atlas, not the data. Start with the 2019 executive summary, written in the middle of a tourism boom … “2018 was a record-breaking year for California hotel development, and as we predicted, 2019 is on pace to eclipse it,” the snapshot enthusiastically stated. “Lenders and developers continue to be very bullish on new California hotels, as they see a very positive long-term outlook for the Golden State. The rapid rise in construction costs has done very little to dampen the supply of new California hotel rooms.” Now see what Atlas wrote four years later, in mid-2023, in a far more anxious timeframe … “Through the first six months of 2023, California continued to see a decline in the number…

By Alex Barreira – Staff Reporter, San Francisco Business Times Aug 1, 2023 – Updated Aug 1, 2023 5:11pm PDT The seeming torrent of new hotel supply that hit the California market in 2021 and 2022 after Covid delays is petering out in the Bay Area and throughout the state, a new hospitality research report suggests. Through the first six months of this year, just five new hotels have opened across the Bay Area’s nine counties, compared with 12 over that time in 2022 and 14 in the first half of 2021. A better point of comparison — the room count of those projects — shows 2023 pacing just 33% and 39%, respectively, of the previous two years at the midway point. The report, a mid-year development survey from Irvine-based hotel consultancy and research firm Atlas Hospitality, predicts a further slowdown of new hotel projects breaking ground based on several macro factors that hit particularly hard in the Bay Area. “We are clearly seeing the impact of the increased cost of new construction,” wrote Atlas Hospitality CEO Alan Reay in the report. “As interest rates and the scarcity of construction financing takes a hold, we are forecasting a big decline in new hotels…

Projects Entering Construction Phase Expected To Decline Over 18 to 24 Months By Bryan WrotenHotel News Now July 31, 2023 | 6:13 AM Fewer hotels opened in California in the first half of 2023 compared to last year, according to a new survey. Atlas Hospitality Group’s California Hotel Development Survey 2023 Mid-Year shows that 20 hotels opened in the state during the first six months of the year, a 31% year-over-year drop. The number of rooms opened was 3,561, also a 24% decline. The number of hotels under construction increased by 5.2% to 122 while the number of hotel rooms under construction remained relatively flat at 16,321 compared to 15,958 last year. Atlas forecasts a significant decline in the number of new hotels entering the construction phase over the next 18 to 24 months. The figure that jumped out for Atlas President Alan Reay was the 60% decline in hotel openings compared to the first six months of 2021. “But I think it’s no surprise to anyone,” he said. “Unless [your hotel was] actually under construction, the number of those projects is definitely drying up now, and primarily because of what’s going on in the marketplace — [rising] interest rates and…

BY CARLY OLSON, SUHAUNA HUSSAIN, HELEN LI JULY 27, 2023 4:11 PM PT Ticket prices aren’t the only eye-popping expense that comes with seeing Taylor Swift perform selections from her 10-album career on the final leg of her record-breaking Eras tour. With her six Los Angeles shows drawing fans from all over the Southwest, hotels near SoFi Stadium and around the city are booking up, sending rates through the roof. That’s a boon for L.A.’s tourism industry, which has been grappling with the effects of a rolling labor strike this summer since contracts expired June 30, affecting some 15,000 hotel workers. But Unite Here Local 11, the union representing workers at some 60 hotels in L.A. and Orange counties, wants to see Swift withhold her bounty until more of it can be shared with its members. On Thursday morning, L.A. hotel workers gathered for a curious crossover between a rally and a love letter to Swift. Housekeepers, front desk workers, cooks and other hotel employees protested in front of the Hyatt Regency LAX, urging the pop star to postpone her upcoming concerts in solidarity with hospitality employees, who are fighting for higher wages while hotels stand to profit enormously from her visit. Protesting workers held printed signs referencing the…

BY LORI WEISBERG JULY 25, 2023 5:33 PM PT Just a year after the Inn at Rancho Santa Fe was sold to a luxury resort operator, the century-old property has been sold yet again — this time for $100 million. While the sales price is more than twice what former owner Steve Hermann paid over a year ago, the century-old property is in the midst of a $50 million renovation that the hotel announced in late May would be completed by late summer. That has now been delayed until November. This story is for subscribers We offer subscribers exclusive access to our best journalism.Thank you for your support. The sale, announced on Tuesday, marks the third-highest hotel transaction in California so far this year, and, more significantly, it is the highest amount paid per room — nearly $1.2 million — for any hotel acquired this year in the state, according to the brokerage, Atlas Hospitality Group. The two priciest overall hotel sales so for this year have been the Claremont Resort, Berkeley, at $163.3 million, and the Standard West Hollywood, at $112.5 million, said Alan Reay of Atlas Hospitality. The 21-acre hacienda-style Rancho Santa Fe property, at one time owned by Petco Park…

GEM Realty Capital Pays $100 Million for The Inn at Rancho Santa Fe By Lou HirshCoStar News July 25, 2023 | 12:11 P.M. The Inn at Rancho Santa Fe, a luxury resort in a posh enclave near San Diego, has sold for about $100 million in the region’s largest hospitality transaction this year by price amid a rebound in travel as the pandemic wanes. Chicago-based investment firm GEM Realty Capital acquired the property with 80 rooms, built in 1922 at 5951 Linea Del Cielo, from Steve Hermann Hotels of Montecito, California, according to public filings and a statement from the seller’s broker. The sales price also ranks the deal as the third-largest hospitality transaction in California this year. CoStar data shows Hermann acquired the property in May 2022 for about $42.7 million before embarking on what brokers in the latest sale described as a “top-to-bottom” renovation that’s currently underway. The upgrade is expected to be completed in the fourth quarter. “The buyer recognized an incredible opportunity to acquire a five-star luxury resort in a market with extremely high barriers to entry,” Elliot Eichner, principal at Sonnenblick-Eichner Co., said in a statement. The brokerage represented the seller in the transaction. Eichner said the seller…

BY BRYNN SHAFFER JULY 24, 2023 Palisociety, a collection of boutique hotels, is experiencing tremendous growth, despite the hotel industry still being in post-pandemic recovery mode.  As part of that expansion, the Venice-based company recently opened a hotel in Hollywood, bringing the total number of properties in L.A. to seven. “Being able to have multiple outlets really allows us to be a better hotel company,” said Avi Brosh, the founder and creative force behind the Palisociety brand. Palihotel Hollywood, which opened its doors in June, is a cosmetic remodel of an original 1950s inn. Located directly off Sunset Boulevard, it’s situated courtyard-style with a large rectangular pool in the middle, allowing visitors to feel as if they’ve escaped to a vintage hideaway. “The bones were great,” Brosh said. While maintaining the built-in charm of the original architecture, Palisociety reimagined the property by painting the exterior green and revamping the overall asset with one-of-a-kind custom details. “The design is very intentional to pay homage to an old Hollywood vibe,” Brosh said. “But at the same time, it’s really meant to feel new, contemporary and upscale.”  Palihotel Hollywood is made up of 74 guestrooms and suites – starting at $225 per night –…

Recovering occupancy may not be enough to avoid watchlists, distress By Rachel Herzog JUL 19, 2023, 11:00 AM UPDATED JUL 19, 2023, 6:00 PM In suburban Chicago, where a number of office landlords have seen their loans become delinquent or watchlisted, some hotel owners are also feeling the crunch. “In markets where you’re seeing the biggest dropoff in business and the most distress is markets that are heavily reliant on commercial and business travel,” Alan Reay, the president of hotel brokerage Atlas Hospitality Group, told The Real Deal. “We’re definitely seeing some impact in the hotel sector.” And lenders are keeping a close eye on large portfolios, as well as individual assets. The pressure is clearly on for borrowers to ramp up performance. A joint venture between Blackstone Real Estate Partners and Starwood Capital Group exercised its right to a one-year extension on a $4.7 billion floating rate loan that was scheduled to mature July 9 secured by a national portfolio of 560 limited-service hotels including more than 20 in the Chicago area. Special servicer KeyBank watchlisted the loan in May, according to a report to DBRS Morningstar. “We recently exercised our contractual right to a one-year extension option, and have the right to additional…

Decision points to ongoing weakness for Bay Area hotels By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group PUBLISHED: July 10, 2023 at 8:20 a.m. | UPDATED: July 10, 2023 at 3:34 p.m. OAKLAND — A wobbly hotel operator will surrender ownership of 19 hotels nationwide — including four in the East Bay — as a way to curb worsening debts, a grim new indicator of ongoing post-COVID hospitality ailments. Ashford Hospitality Trust, confronted by maturity dates last month on an array of loans, says it has aborted payments on certain mortgages, including two hotels in Newark, one in Oakland and one in Walnut Creek. The company will let lenders seize 19 properties around the country. “This is a prudent economic decision that reflects a comprehensive capital management process,” said Rob Hays, Ashford Trust’s chief executive officer. The East Bay hotels that Ashford Hospitality Trust will return to lenders are Courtyard by Marriott Oakland Airport in Oakland, Courtyard Newark Silicon Valley in Newark, Residence Inn San Jose Newark in Newark, and Embassy Suites Walnut Creek in Walnut Creek. “With business hotels, and in the case of Ashford Hospitality, you have hotel revenue down, expenses are up and you have a higher cost of financing when the…

HOSPITALITY: SD County Hotel Business Among Top 10 in U.S. BY: KAREN PEARLMAN JULY 3, 2023 The Covid-19 pandemic kept travelers close to home and greatly impacted the hospitality industry, with staffing cuts and hotel closures not uncommon. But with the health emergency more in the rear-view mirror, protocols less restricted and visitors’ minds more at ease, travel picked up, optimism returned and local hotels bounced back in 2022, with numbers of visitors expected to continue to rise. The San Diego Tourism Authority recently released a report that said that last year, $13.6 billion of visitor spending generated by 28.8 million visitors to San Diego eclipsed the $11.6 billion spent locally in 2019. While SDTA said there were six million fewer visitors in 2019, visitors last year spent more time in San Diego than pre-pandemic (4.2 nights vs. 3.7 nights). Local hotels sold 17 million room nights last year, just shy of the 17.7 million sold in 2019. So the hotel industry is feeling optimistic as travel demand grows, with leisure and group business travel remaining strong and the trend for workplaces to allow employees to travel and work remotely. Tourism, Staycation Dollars Spur Remodels, Development – Advertisement – Evans…