Atlas in the news

By Roger Vincent | Staff Writer | Oct. 11, 2024 3 AM PT Construction is underway on a $300-million hotel next to SoFi Stadium, the latest addition to Rams owner Stan Kroenke’s sprawling mixed-use development on the former site of the Hollywood Park horse racing venue in Inglewood. The 300-room Kali Hotel is the only hotel in Kroenke’s master plan for Hollywood Park, and developers hope it will be a favored place to stay for visiting football teams and basketball teams, as well as fans who come to see them play. It is being erected by real estate developer Kali P. Chaudhuri, whose company KPC Development Co. owns and builds commercial properties in California and India. It will be the company’s first hotel in the United States. The hotel will rise 12 stories on Stadium Drive, across a man-made lake from the 70,000-seat stadium, which is home to L.A.’s two NFL teams, the Rams and Chargers. It will be near to the YouTube Theater and within walking distance of the Intuit Dome, the recently opened home of the Los Angeles Clippers, and Kia Forum, which are not part of the SoFi development project. Known officially as the Kali Hotel and Rooftop, Autograph Collection,…

By Caroline Petrow-Cohen | Staff Writer | Sept. 12, 2024 9:14 AM PT Hotel sales are flagging in Los Angeles County and throughout the state as high interest rates and smaller-sized deals have been a drag on the market, according to a recent industry report. During the first six months of the year, the number of hotels that traded hands in L.A. County dropped 6% compared with the same period last year, while the amount of money involved in the sales plummeted 79%, the report by Atlas Hospitality Group concluded. A lack of big-ticket transactions accounted for the steep dropoff, said Alan Reay, president of Atlas Hospitality Group. “What we saw in the first six months of 2024 versus 2023 is a lot smaller transactions,” Reay said in an interview. “There were no trophy or bigger full-service hotels that closed in the first six months.” California is home to about 10,000 hotels and used to see roughly 400 to 450 hotel sales per year. In the first six months of 2024, there have been 122 sales. “It’s substantially below what we typically see in a normal year for California,” Reay said. Across the states, hotel sales have been declining over the last…

Market favors smaller properties that need less capital but struggles with “bid-ask spread” Sep 10, 2024, 11:30 AM | By TRD Staff It pays to think small in the Los Angeles hotel market. At least, that’s how the market has worked so far this year. Los Angeles County saw a 6 percent drop in the overall number of hotel sales in the first half of this year while the total dollar volume plummeted 79 percent, the Los Angeles Business Journal reported, based on a report by Atlas Hospitality Group.  The data indicate a sharp shift toward smaller properties and price tags compared to the first six months of 2023. The decline from 17 deals in the prior period to 16 this year was accompanied by a dip of nearly $800 million in dollar volume — from a tick over $1 billion a year ago to $212 million over the first half of this year.  A total of 1,026 rooms changed hands this year, down from 1,313 in the first half of last year, a drop of 22 percent. The average price on a per-room basis declined from $317,000 to $194,000, down nearly 39 percent. The market appears to struggle with a…

Hannah Welk | September 9, 2024 Hotel construction has been inching downward in Los Angeles from 49 projects with 7,650 rooms as of midyear 2020 to 19 projects with 2,121 rooms this year, according to data from Atlas Hospitality Group. “We’re seeing a lot of projects that were under construction going into foreclosure or bankruptcy,” said Alan Reay, president of Atlas Hospitality. He added that hotels are “trading below replacement costs” which was further making things difficult. Another issue, he said, is the difficulties in securing financing for hotel projects. There are currently more than 29,000 hotel rooms in planning, compared with more than 42,000 this time in 2020. Reay said only a small percent of those rooms will actually be built. “I really don’t see a lot of new projects that are still in planning getting built. The product type that is getting built is mid-size hotels like Residence Inn by Marriott, Hampton Inn and Suites, 100 to 200 rooms, very little as far as full-service hotels,” Reay said. Still, some experts say development is on an upward trend. “We are starting to see some activity…but it’s not as active as it was pre-pandemic,” said Sonnet Hui, general manager and vice president of real estate…

SFGATE contributor Randy Diamond recaps the latest in San Francisco hotel news for the column Get a Room By Randy Diamond | Aug 30, 2024 This week in Get a Room, SFGATE’s roundup of news on hotels and accommodations in San Francisco, we check in on the Hilton and Parc 55. The city’s largest hotel, the Hilton San Francisco Union Square, is in flux after its investors defaulted on their loan last year. During a recent visit, the disarray was hard to miss. Compared with other cities, the industry in San Francisco continues to lag in its recovery, but optimism isn’t hard to find — as suggested by a new hotel with a clear vision from its investors for the city. Elsewhere, a hotel in Fisherman’s Wharf was awarded top marks in an annual readers’ poll (with one visitor saying it has “the coolest atmosphere of any hotel I’ve been to”). The market’s volatility is on display as a former startup unicorn that disrupted the lodging industry now faces a rough road after a sharp financial tumble. A candidate to become San Francisco’s next mayor is tied to the local company as it revamps by partnering with a legacy hotel brand to weather the…

August 20, 2024 | By The Registry Staff The recently published Atlas Hospitality Group’s 2024 Mid-Year Sales Report shows California’s hotel market is facing significant challenges this year, driven by higher interest rates and a disconnect between buyer and seller price expectations. These factors have created substantial downward pressure on hotel sales volumes across the state. As a result, California’s hotel sales volume has dropped by 48.5 percent compared to the same period in 2023, with individual sales also experiencing a decline of 1.6 percent.  This marks the fourth-lowest sales volume since tracking began, underscoring the severity of the current market conditions. The median price per room in California has fallen to $149,262, representing a 7.2 percent decrease from the previous year. “We have seen a dramatic decline in the total dollar volume of California hotel sales during the first six months of 2024, down 48.4 percent,” said Atlas Hospitality Group President Alan Reay. “This is the result of fewer larger hotel sale transactions, which is due in large part to the discrepancy between buyer and seller price expectations and the difficulty in obtaining financing. On the other hand, we are still seeing smaller hotels trading, where buyer and seller price…

The North Bay saw few hotel sales and development projects through the first half 2024. Only one new hotel opened, the 99-room Wyndham Garden Inn Redwood Valley in Mendocino County. CHERYL SARFATY | THE NORTH BAY BUSINESS JOURNAL August 19, 2024, 10:30AM Hotel sales and development plans in California as of June 30 continued to reveal a downward trend, according to a real estate firm that tracks the state’s hotel industry. In the North Bay, the decline since the end of 2023 was most evident among hotel sales, with three of the six counties — Marin, Lake and Solano — reporting no hotel sales at all, according to Atlas Hospitality Group, a Newport Beach-based real estate brokerage that specializes in hotel properties across California. “The prices that the sellers are looking for are not in sync with buyers’ expectations, and (that is) why buyers have opted to purchase hotels in other markets,” Alan X. Reay, president and founder of Atlas, told the Business Journal. Atlas recently released its midyear hotel surveys, one for sales, the other for development plans. It also produces year-end surveys. The State of Hotel Sales As of June, 13 hotels had sold in the North Bay. The…

Guidance price of $125M for 625-room property is $40M less than 2012 purchase By Isabella Farr | AUG 15, 2024, 11:30 AM MetLife Investment Management and Loews Hotels & Resorts have put their Hollywood hotel up for sale — with a steeply discounted price tag. The firms have listed the Loews Hollywood Hotel with a guiding price of $125million — about $40 million less than what Loews paid for the property in 2012, according to Real Estate Alert. The guidance price comes out to about $200,000 per room. MetLife, which formed a joint venture with Loews in 2012 and holds a 50 percent stake in the hotel, did not respond to a request for comment. Eastdil Secured holds the listing. The 625-key hotel, which sits on the edge of Ovation Hollywood, a shopping mall formerly known as Hollywood and Highland, is pitched as a redevelopment opportunity — or a chance for a new brand to take over. After Loews and MetLife bought the property at 1755 Highland Avenue, the duo planned a $26 million renovation of the hotel. In 2021, Loews and MetLife scored $91 million from Värde Partners, an alternative investment firm, to refinance the 625-key hotel, replacing debt…

By Emily Santiago-Molina | August 12, 2024 A California-based hospitality investment entity with ties to the Marriott family has bought Laguna Beach’s Pacific Edge Hotel, the Business Journal has learned. The hotel has traded hands for $80 million, or $640,000 per key, in a deal making it the largest hotel sale in California so far this year. New York-based Highgate Hotels LP and Morgan Stanley & Co., which purchased the property together in 2017 for $57.5 million, sold the 125-room property to Dune Drifter, a new entity. It is the state’s highest priced transaction in the first six months of this year, according to Alan Reay of Atlas Hospitality. The standing top deal in Orange County remains the purchase of the 260-room Montage Laguna Beach by Tilman Fertitta for $650 million, north of $2.5 million per key, in late 2022. Pacific Edge fronts the ocean on Sleepy Hollow Lane and is about half a mile south of Broadway Street and the main entry to the downtown district. Patrick Deming from Eastdil Secured LLC was the listing broker. Via this local takeover from New York’s Highgate, the new owners will ensure that the renovation and business plans submitted to the city…

Lodging market experts blame interest rates and operating costs for investor absence By TRD Staff | Aug 13, 2024, 11:00 AM Hotel sales across the Golden State have turned to lead. In the first half of the year, hotel sales in California sank 48.5 percent to $1.19 billion year over year,the San Jose Mercury News reported, citing figures from Atlas Hospitality Group. In Northern California, investors plunked down $447.5 million for hotels, 36.9 percent less than they paid a year ago. In Southern California, they paid a combined $739.4 million, 53.7 percent less. “The lingering impact of higher interest rates, combined with the rise in operating costs, particularly in labor and insurance, are holding down sales volume and prices,” Atlas Hospitality Group, based in Newport Beach, reported. An equally dour report in February said California hotel deals totaled a combined $3.76 billion last year, compared with $8.6 billion in 2022, as investors sat on the sidelines. There were three major hotel deals in the Bay Area between January and June ,according to the brokerage firm, which tracks the lodging market across the state. In Alameda County, an unidentified investor bought the 148-room La Quinta Inn in Oakland for $12 million,…