Atlas in the news

BY JOSEPH PIMENTEL ORANGE COUNTY PUBLISHED 5:45 PM ET AUG. 20, 2020 The pace of new hotel openings in California is going down. After the state saw a record number of hotel openings and construction, the coronavirus-catalyzed economic downturn has slowed new hotel openings and developments in Orange County and throughout California through the first half of this year, according to a new report by Irvine-based Atlas Hospitality Group. Last year, California welcomed the opening of 92 hotels totaling 11,795 rooms, the most in the state since 2017. This year, 35 hotels totaling 3,500 rooms have opened in the first half of the year, but the downturn caused by the coronavirus has many hotel operators delaying, deferring, or outright abandoning their hotel projects, Atlas Hospitality President Alan Reay said. Hotel sales are also down, Reay said, and the number of hotels under construction has decreased 17 percent year-over-year from 234 to 194. “We are forecasting that the vast majority of hotel projects in planning will simply not get built,” the report states. “Developers are already looking at other uses, namely residential. For those developers that still want to move forward with new hotel development, they are going to find it virtually impossible…

https://www.bizjournals.com/sanfrancisco/news/2020/07/30/bay-area-officials-sprint-project-roomkey.html By Alex Barreira  – Staff Reporter, San Francisco Business Times Jul 30, 2020, 4:27pm PDT Updated Jul 30, 2020, 4:29pm PDT A new state initiative is granting Bay Area officials about $100 million to purchase permanent housing for the homeless, opening a potential exit route for some struggling hotel owners. It’s part of Project Roomkey, a project which aims to build on the temporary use of hotels to house the homeless during the pandemic, encouraging counties to buy hotels, motels and apartment buildings for long-term use as supportive housing. As part of his latest state budget, Gov. Gavin Newsom recently said there was $600 million in federal relief funding available to California counties to participate in the program. The state will begin distributing these funds Aug. 13. But the funding will expire if it’s not used by the end of the year, which has sent officials in at least three Bay Area counties — Alameda, Contra Costa and San Francisco — sprinting to talk with hotel property owners possibly interested in selling, the San Francisco Chronicle reports. Here are a few of the factors that will help determine how many of these deals get done: • Budget hotels were already being squeezed, and some are inclined to leave as…

Iconic Property’s Owner Explores New Model as Pandemic Hits Hotels Hard https://product.costar.com/home/news/shared/616076017?utm_source=newsletter&utm_medium=email&utm_campaign=personalized&utm_content=p4 By Lou Hirsh CoStar News July 29, 2020 | 6:46 P.M. The iconic Chateau Marmont hotel, a nearly century-old landmark off Los Angeles’ famed Sunset Strip and known as a secluded luxury stopover for celebrities, is being eyed by its current owner for a conversion into a private members-only retreat. Hotelier Andre Balazs is planning to convert the 63-room property at 8221 W. Sunset Blvd. in West Hollywood, along with others that he owns worldwide, into a “private, members-owned hotel” that would be operated similar to a club with fee-paying members and allow guests to acquire ownership stakes, a company spokeswoman told CoStar News. Balazs told the Wall Street Journal, which first reported the plan, that he has been considering this strategy for the past three years. He is now among numerous owners nationwide now mulling alternative business models as the coronavirus pandemic is taking a serious financial toll on travel and tourism, especially high-end vacations at luxury hotels. “There are owners out there who are looking to find other uses for their hotels,” said Alan Reay, president of California-focused hotel brokerage and research firm Atlas Hospitality Group in Irvine, who is not involved…

https://www.latimes.com/business/story/2020-07-24/motels-coronavirus-design By ROGER VINCENTSTAFF WRITER  JULY 24, 2020 11:03 AM After many years of being looked down on, motels are getting new respect in the era of social distancing. Guests at open-corridor inns may come and go without passing through crowded lobbies, packed elevators or enclosed hallways where viruses may linger. “In outdoor corridors, people feel safe,” said Mike Riverside of the Asian American Hotel Owners Assn. “People can go directly to their rooms” and potentially reduce exposure to the coronavirus. Outdoor-facing, low-rise motels and hotels also stand to benefit from being typically reached by car, unlike big resorts and urban hotels that rely on air travel to deliver most guests. With many still apprehensive about flying, drive-to destinations are widely expected to be the first beneficiaries of the gradual return of pleasure jaunts away from home. “There is pent-up demand for leisure travel and nobody is too excited to share an elevator,” said Patrick Scholes, an analyst who follows the lodging and leisure industries for investment bank SunTrust Robinson Humphrey. “For the moment, it definitely does give you an advantage” to have outdoor corridors in your hotel. Inns where every guest’s front door opens to the elements loom large in the collective memories…

Some of Retailer’s Hotel Development Sites Were Replaced With New Operators https://product.costar.com/home/news/1613864686?tag=1 By Katie Burke CoStar News July 22, 2020 | 09:09 AM Home furnishings retailer West Elm’s plans to enter the hospitality industry by building at least six hotels across the country appear to have hit a snag amid delays and legal battles, threatening its attempt to follow other chains in developing commercial property beyond stores. The retailer, known for its upscale, midcentury-modern styles, had been working with developers nationwide in recent years on sites that were initially set to be future West Elm Hotels. However, those planned in Oakland, California; Detroit and Indianapolis have been replaced with another boutique hotel operator, according to the developers. And West Elm’s projects in Portland, Maine; Savannah, Georgia; and Minneapolis have not materialized, though initial announcements outlined openings beginning this year. Neither New York City-based West Elm nor its parent company, Williams-Sonoma Inc. of San Francisco, responded to requests for comment from CoStar News. Rampant competition in the sector among corporate stalwarts such as Marriott, Hilton and the InterContinental Hotels Group made it challenging for newcomers to build their brand, even before the coronavirus pandemic disrupted the global hospitality industry. “It is very…

Court to Sell Off California’s Viceroy L’Ermitage After Former Owner’s International Legal Troubles https://product.costar.com/home/news/shared/1827109742?utm_source=newsletter&utm_medium=email&utm_campaign=personalized&utm_content=p4 By Lou Hirsh CoStar News July 20, 2020 | 4:10 P.M. A luxury Beverly Hills, California, hotel that is popular with celebrities could be sold at a discount in a court-ordered auction next month, following what international law enforcement officials call a money laundering and bribery scheme they say involves former owner Jho Low. Brokerage firm Keen-Summit Capital Partners is seeking bids of at least $104 million for the 116-room Viceroy L’Ermitage Beverly Hills hotel, located at 9291 Burton Way near the well-known and expensive Rodeo Drive retail district, ahead of an auction scheduled Aug. 19. That price, at almost $900,000 a room, is roughly half of the record sale price that another luxury hotel garnered last year in a wealthy area that’s one of the nation’s strongest hotel markets. The court-appointed attorney and broker for the L’Ermitage hotel, which was seized in 2016 by federal authorities as part of an investigation into what the U.S. Department of Justice and Singapore government say is a money-laundering scheme involving Low, a Malaysian financier, said they have already fielded considerable buyer interest in the property. The site has been known for the past…

Bidding will start at $104 million https://labusinessjournal.com/news/2020/jul/13/lermitage-luxury-hotel-headed-auction/ By Hannah Madans Monday, July 13, 2020 The Viceroy L’Ermitage Beverly Hills hotel could have a new owner soon. The luxury hotel, which was seized in a money laundering scandal involving financier Jho Low, will be sold at auction Aug. 19. Matthew Bordwin of real estate brokerage Keen-Summit Capital Partners, who is handling the sale, announced July 9 that a stalking horse bid of $100 million had been accepted by Michael Eidelman, special master appointed by the United States District Court for the Central District of California. The stalking horse bidder, Bordwin said, was a corporate entity. The company behind it is a confidential investor “with significant hospitality experience.” An open auction will take place Aug. 19 where the minimum bid starts at $104 million. Interested buyers must submit identification and financial information by Aug. 3. Bordwin said he could not speculate how much the property would end up selling for but expects it to generate significant interest. “It was an interesting time for us to come to market in the middle of Covid,” Bordwin said. “The hospitality market is taking a beating. We found that this is a unique trophy property and a…