Atlas in the news
Developers plan 96-key Koreatown hotel
https://therealdeal.com/la/2020/10/20/developers-plan-96-key-koreatown-hotel/ Six-story project proposal comes as LA hotels continue to struggle to fill rooms TRD LOS ANGELES / October 20, 2020 11:50 AM By Dennis Lynch | Research By Jerome Dineen Hotel construction projects in California may be struggling right now, but a pair of Los Angeles developers are looking to the future. A newly-proposed development calls for a 96-key hotel to rise on the southeast corner of Koreatown, property records show. An LLC managed by Kyong Baek and Jai Baek wants to build the six-story hotel at 956-962 Menlo Avenue. They could not be immediately reached for comment. Through 1040 Dewey LLC, the Baeks acquired the two small residential properties at that location in separate transactions for a total of $4.5 million in June 2018 and June 2019, property records show. The filing follows a report in August that showed the near-term outlook bleak for proposed hotel development projects in California. Atlas Hospitality Group concluded that the vast majority of hotel projects in planning will not get built. The report tracked hotel projects in the first six months of 2020. L.A. area hotels have improved slightly since the early days of the pandemic. As of mid-September, the vacancy rate at L.A. hotels was nearly 57 percent, according to…
Hotel Industry’s Lost Momentum
https://www.ocbj.com/news/2020/oct/19/hotel-industrys-lost-momentum/ SIX OPEN IN 2020; FUTURE PLANS IN DOUBT By Katie Murar Monday, October 19, 2020 2020 has been the hardest time for local hotels in recent history, due to the impact of the pandemic on travel, according to longtime industry observers. “California hotels were on a very steep curve in 2018 and 2019 across the board, with increases in under construction, planned and opened properties,” Atlas Hospitality Group founder Alan Reay previously told the Business Journal. “That momentum is lost.” In the previous market crash in 2009, hotel room revenues in Orange County’s tourism-driver, Anaheim, fell 17% from year-ago levels. In the first eight months of 2020, that figure is down nearly 56% year-over-year, a figure topping the 54% drop experienced in Los Angeles, according to travel research firm STR. Occupancy continues to suffer, with levels around 46% for the first seven months of the year, down from typical averages around 75%, according to STR. Average daily rates for OC hotels stood at about $132 at the end of August, down 19% from a year ago. This year’s ranking of the top hotels in Orange County by room count doesn’t take into account temporary closures. Several local properties on…
Two Silicon Valley hotels default on mortgages amid coronavirus-linked lodging slump
https://www.mercurynews.com/2020/10/19/silicon-valley-hotel-default-loan-coronavirus-slump-real-estate-tech/ Sunnyvale hotel, Mountain View hotel, fall behind on mortgage By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group PUBLISHED: October 19, 2020 SUNNYVALE — Two hotels in Silicon Valley have defaulted on their mortgages and face murky futures, fresh evidence that the economic woes unleashed by the coronavirus may widen. A mortgage on the hotels, one in Sunnyvale and one in Mountain View, has landed in default and could be foreclosed, public documents filed in September in Santa Clara County show. The hotels that primarily serve the hotel and business markets are taking the biggest hit,” said Alan Reay, president of Irvine-based Atlas Hospitality Group, which tracks the lodging market. The South Bay hotels whose loans are in default, according to county property records filed in early September: — Wild Palms Hotel, with 208 rooms, at 910 E. Fremont Ave. in Sunnyvale. — Hotel Avante, with 91 rooms, at 860 E. El Camino Real in Mountain View. An analysis of the hotels a few years ago showed that both the Wild Palms Hotel and the Hotel Avante are part of the Joie de Vivre hotel group, which is a boutique chain that’s owned by Hyatt Hotels. Hyatt completed a purchase of Joie…
New Hotels Near San Diego Count on ‘Top Gun’ Factor to Boost Business
https://product.costar.com/home/news/shared/365081903?utm_source=newsletter&utm_medium=email&utm_campaign=personalized&utm_content=p4 Spring 2021 Debut Planned for Upscale Oceanside Complex with Hollywood Connection By Lou Hirsh CoStar News October 12, 2020 | 3:52 P.M. Developer S.D. Malkin plans a spring 2021 opening for what is being billed as the San Diego region’s largest oceanfront hotel project in more than a century, a project aimed at attracting tourist interest for a vintage house used in the filming of the 1980s movie “Top Gun.” The two-hotel complex in downtown Oceanside, California, is designed to total 387 rooms in the new Mission Pacific Hotel and Seabird Resort. The project sits on the site of the Victorian-style Oceanside beachfront house, originally built in 1887, where stars Tom Cruise and Kelly McGillis filmed several interior and exterior scenes in the hit fighter pilot film. The hotel development required the relocation of the vintage house to a spot in between the two new buildings. Despite a brutal pandemic climate for U.S. hotels, developers and operators of the planned beachfront complex are counting on that Hollywood connection and continued regional drive-in leisure traffic to boost prospects. “We have a very strong ‘drive to’ market, running from Los Angeles to Phoenix, and we think that will remain strong in this coming year,”…
Two huge Hiltons in San Francisco land on watchlist for $725 million loan
https://www.bizjournals.com/sanfrancisco/news/2020/10/12/largest-hotels-hit-watchlist-cmbs-park-hotels.html By Alex Barreira – Staff Reporter, San Francisco Business Times October 12, 2020 The owner of the Bay Area’s two largest Hilton hotels has requested help meeting obligations on a $725 million loan backed by the two properties, a potential sign of trouble for a hotel market already battered by the pandemic. The borrower, Park Hotels & Resorts Group Inc., a publicly traded real estate investment trust based in McLean, Virginia, hasn’t missed any regular debt payments on the loan but has landed on an industry watchlist for commercial-mortgage back securities at risk of defaulting. The CMBS loan is backed by the Hilton San Francisco Union Square and the Hilton Parc 55, which both remain closed amid the travel slowdown caused by Covid-19. The Union Square property, the region’s largest hotel, has 1,921 rooms and a 2016 appraised value of $1.02 billion, while the Parc 55, a block away from its larger sister hotel, has 1,024 rooms and an appraised value of $540.4 million. DOUGLAS FRUEHLING The 2016 loan originally from JP Morgan Chase & Co. was repackaged and sold to Wells Fargo as a CMBS. Wells Fargo granted Park Hotels (NYSE: PK) a six-month deferral of its regular contributions (typically 4% of revenue at Park…
Hotels, motels struggling in COVID times
https://www.timesheraldonline.com/2020/10/07/hotels-motels-struggling-in-covid-times/ Business is down 30 to 40 percent at one Vallejo establishment By Katy St. Clair | kstclair@timesheraldonline.com | Vallejo Times Herald PUBLISHED: October 7, 2020 at 3:00 p.m. | UPDATED: October 7, 2020 at 6:14 p.m. The COVID-19 pandemic has sent destructive ripples throughout the economy, as the bar, restaurant and hospitality industry has been one of the most affected. Not only have people lost jobs in those industries — with more than 5.9 million jobs lost by May of this year according to Restaurant Business Online — but less people are patronizing existing establishments. The catastrophe is an “imperfect storm” of Americans having less disposable income, a fear of catching coronavirus, with more and more businesses going under. Another industry hard-hit by the pandemic has been that of hospitality. The hotel/motel business has not only counted on travelers for its bedrock, but also business travelers and convention traffic, all of which have been put on hiatus during the pandemic. Alan Reay, founder and president of the Atlas Hospitality Group brokerage firm, keeps a close eye on industry trends and statistics and reports that as of August of this year, hotel revenues in California have fallen 65.5 percent. The…
Irvine Company’s 1,700 layoffs mostly hit staff at 3 hotels, resorts
https://therealdeal.com/la/2020/10/07/irvine-companys-1700-layoffs-mostly-hit-staff-at-3-hotels-resorts/ Among those were workers at Donald Bren-led firm’s shuttered Hotel Irvine and Fashion Island Hotel TRD LOS ANGELES / October 07, 2020 03:37 PM By Matthew Blake Real estate investment and development juggernaut Irvine Company has laid off 1,700 employees since the coronavirus took hold, with most of those cuts affecting workers at three hotels and resorts in Orange County. The layoffs — reported to the state in August through WARN notices — include 698 employees at The Resort at Pelican Hill in Newport Beach, 372 workers at Fashion Island Hotel in Newport Beach, and 317 workers at the Hotel Irvine. The notices indicated that the layoffs took place in May and were made permanent. The affected workers included room cleaning staff, banquet servers, bartenders, cooks, and “customer experience agents.” The Hotel Irvine and Fashion Island Hotel remain closed. Also let go were 106 workers at Oak Creek Golf Club in Irvine, including practice facility attendants and kitchen staff. Another 103 workers who held various office positions at a research park at the University of California at Irvine were laid off, along with 64 employees at Irvine Company’s office in Newport Beach. Each notice states the layoffs are “permanent and there is no collective…
Beachfront Hotels Near Los Angeles Play Financial Catch-Up in Pandemic
https://product.costar.com/home/news/shared/1561657411?utm_source=newsletter&utm_medium=email&utm_campaign=personalized&utm_content=p4 Owner of Santa Monica Properties Making Delayed Loan Payments in Tough Climate By Lou Hirsh CoStar News October 7, 2020 | 4:56 P.M. The owner of two prominent beachfront hotels in Santa Monica, California, said the operators caught up on payments on what had been the nation’s biggest newly delinquent loan, following unprecedented challenges for hotels nationwide during the pandemic. A report this week by credit tracking firm Fitch Ratings said the $357 million loan secured by full-service, luxury hotels Shutters on the Beach and Hotel Casa del Mar, owned by Edward Thomas Co., was the largest new commercial property loan delinquency reported nationwide in September. Hotel operators said Tuesday they have become current on payments through September, after the loan was transferred to special servicing in April and the company missed payments in May and June. “Despite the toll that COVID-19 took on the commercial mortgage backed securities market, the Edward Thomas Company is current on all debt service payments,” company spokesman Doug Elmets said in an email to CoStar News. Like many Southern California hotels, the two properties in coastal Santa Monica, west of Los Angeles, closed in mid-March and reopened at reduced capacities in July. Overall Los Angeles regional hotel occupancy…
Dana Point’s Monarch Beach Resort joins Waldorf Astoria chain
https://www.ocregister.com/2020/10/01/dana-points-monarch-beach-resort-joins-waldorf-astoria-chain/ New owner switches hotel from independent status By JONATHAN LANSNER | jlansner@scng.com | Orange County Register PUBLISHED: October 1, 2020 at 12:01 p.m. | UPDATED: October 1, 2020 at 12:42 p.m. The Monarch Beach Resort will once again be part of a luxury hotel chain. The 400-room, five-diamond hotel in Dana Point announced it’s joining with Hilton to manage and market the resort and will be rebranded as the Waldorf Astoria Monarch Beach Resort & Club. The independent resort was bought by Ohana Real Estate Investors for a reported $497 million in November. “It’s fitting that the storied Waldorf Astoria brand is coming to Dana Point — which is one of the most iconic beachfront communities in California,” said James Cole, an Ohana partner. ”This partnership will elevate the entire resort experience.” Waldorf Astoria, with 32 resorts in its portfolio, has a name derived from an iconic New York City skyscraper hotel that is now owned by others. Hotel analyst Alan Reay of Atlas Hospitality says the chain’s marketing muscle will greatly help the resorts, especially in tough pandemic times. “I think it is a good move as Hilton has very little product in south Orange County, so it should do very well,” Reay said. Monarch Beach…
Airline Moves to Shore Up Financing on Los Angeles’ Tallest Building
https://product.costar.com/home/news/shared/894412140?utm_source=newsletter&utm_medium=email&utm_campaign=personalized&utm_content=p4 In Tough Hotel and Office Market, Korean Air Could Sell Stake in Wilshire Grand Center By Lou Hirsh CoStar News September 19, 2020 | 6:40 A.M. The airline owner of Los Angeles’ tallest tower may be seeking to sell some or all of it as it extends $950 million in loans to the building’s hotel operator. The move comes as the coronavirus pandemic further hammers the hospitality industry. Korean Air Lines plans to provide the funds to its fully owned U.S. hotel operator, Hanjin International Corp., for the soaring Wilshire Grand Center office and hotel tower in downtown Los Angeles. The prominent, 1,100-foot tower complex became the city’s tallest building when it was built in 2017 at 900 Wilshire Blvd. According to a Korean stock exchange disclosure from Korean Air, translated into English, the company is arranging the loans on the Los Angeles property to cope with the deterioration of management in the U.S. hotel industry. Hanjin has $900 million in debt at the property maturing this month. The firm had stalled in negotiations with lenders over refinancing debt owed on the 73-story, mixed-use Los Angeles tower that contains an 889-room InterContinental hotel, restaurants and offices. The deal is meant to help…
‘Tsunami’ of hotel closures is coming, experts warn
https://www.latimes.com/business/story/2020-09-19/hotels-out-of-business-covid-pandemic By HUGO MARTÍNSTAFF WRITER SEP. 19, 2020 5:05 AM Located on one of the world’s most expensive strips of commercial real estate, the upscale Luxe Rodeo Drive hotel has closed, a casualty of a pandemic that is likely to put more hotels out of business. The 86-room hotel, which for 27 years shared a city block with such high-end outlets as Cartier and Harry Winston, notified its workers last week that it would permanently cease operations because of the financial effects of the COVID-19 crisis. “Please accept my sincerest gratitude for your service and loyalty and know that this decision was not made lightly,” Efrem Harkham, the chief executive of Luxe Hotels, which owns or operates three other hotels in Los Angeles and New York, told workers in a letter. The Luxe Rodeo Drive is the first high-end hotel in the Los Angeles area to go out of business because of the pandemic, and industry experts point to an unusually high loan delinquency rate among hotel borrowers as a sign that more closures are likely to follow. “We know there is a tsunami outside. We know it’s going to hit the beach. We just don’t know when,” said Donald Wise,…
Mayors Near Disneyland, Among the Longest Closed US Tourist Hubs, Seek Reopening Rules
https://product.costar.com/home/news/2081137948 Lingering Theme Park Closings Add to Real Estate Fallout in California’s Orange County By Lou Hirsh CoStar News September 17, 2020 | 6:16 P.M. A coalition of Orange County mayors is calling on California Gov. Gavin Newsom to set reopening guidelines for Disneyland Resort and other area theme parks in one of the largest U.S. tourist hubs where main attractions have been closed since the pandemic’s start, disrupting the retail, tourism and real estate industries. The mayors are banding together to demand reopening permission and protocols for the the parks including Anahiem’s Disneyland, the nation’s second-most visited theme park. They seek guidelines similar to those that have allowed major attractions in Florida to reopen with reduced capacities and hygiene-related restrictions, including Walt Disney World in Orlando. “It’s a disaster right here,” said Anaheim Mayor Harry Sidhu at a news conference, which also included the mayors of neighboring Garden Grove and Buena Park, which is home to the Knott’s Berry Farm theme park. “How long are you going to keep us closed?” Newsom said this week he plans to “soon” issue the long-awaited guidelines for opening the California theme parks that have been closed for about six months. However, he did not provide a timeline…
