Atlas in the news

Montage, Ritz-Carlton Sale Scrapped DELAYED PORTFOLIO DEAL CANCELED By Katie Murar Monday, May 11, 2020 https://www.ocbj.com/news/2020/may/11/montage-ritz-carlton-sale-scrapped/ The blockbuster sale of two Orange County’s poshest resorts has been nixed, following months of delays and discord from both the buyer and seller. Korea’s Mirae Asset Financial Group said last week it is terminating its deal to buy a collection of 15 upscale hotels in the U.S. from Chinese insurer Anbang Insurance Group, claiming the seller had breached contract obligations. The portfolio includes the Montage Laguna Beach and Ritz-Carlton Laguna Niguel. Mirae accused Anbang of failing to “timely disclose and discharge various material encumbrances and liabilities impairing the hotels and failed to continue the operation of the hotels in accordance with contractual requirements,” said Mirae Asset, which said it is also seeking to recover its 10% deposit. The two OC resorts were initially expected to trade for at least a combined $900 million in a deal originally slated to close last month. A string of issues had put the deal in jeopardy over the course of 2020; local industry execs had been expecting the deal to fall apart. The portfolio sale, expected to have a total price tag in the $5.8 billion range, was,…

6 California resorts in limbo after Chinese deal to sell collapses China seized hotel owner Anbang two years ago The Orange County Register 05/05/20 6 California resorts in limbo after Chinese deal to sell collapses Who owns six of California’s fanciest resorts? According to numerous media reports, a $5.8 billion deal to sell 15 U.S. hotels has fizzled into litigation. That means ownership is in question for Montage Laguna Beach, Ritz-Carlton Laguna Niguel in Dana Point, Loews Santa Monica, Ritz-Carlton Half Moon Bay, Four Seasons Hotel in East Palo Alto and Westin St. Francis in San Francisco. The Chinese government has been trying to rid itself of hotels after it seized the financially ailing Anbang insurance empire two years ago. A deal to sell the 15 Anbang lodging assets to South Korea’s Mirae Asset Global Investments has collapsed. Mirae said Monday it terminated the deal, announced in September after Anbang breached its contractual obligations. In return, Anbang is suing Mirae in the United States, saying the termination was improper. Mirae “categorically denies Anbang’s claims,” the company replied. Anbang acquired the California luxury resorts in 2016 with its purchase of 15 hotels owned by Strategic Hotels & Resorts of Chicago. Anbang…

The Orange County Register 04/24/20 Irvine Co. Rethinks Hospitality Business, Temporarily Shuts 2 Orange County Hotels Hotel Irvine, Fashion Island Hotel temporarily closed. 1,076 jobs impacted. By Jonathan Lansner Irvine Co. rethinks hospitality business, temporarily shuts 2 Orange County hotels As coronavirus ravages the tourism business, the Irvine Co. will use the closure of two hotels to rethink its hospitality properties and how they operate. The 536-room Hotel Irvine and the 295-room Fashion Island Hotel in Newport Beach have temporarily shuttered, along with dozens of competitors across the nation as pandemic fears quickly shut down travel. The company recently filed a layoff warning notice with the state that said 1,076 workers would be affected. But in a letter to the community, the real estate giant said it wouldn’t simply be idling the hotels. Rather, some significant retooling may be in the works to meet what it sees will be changing needs of travelers in a post-pandemic world. “It is clear that the hotel industry will evolve into a new level of hotel guest expectations and service,” the company wrote of planning that “may include the repositioning and reimagining of our hotels with a focus on delivering a first-class clean, safe…

WCCO 04/12/20 Experts Share Predictions About When We Can Travel Again By Jacquie Cadorette https://wccoradio.radio.com/articles/radiocom/experts-share-predictions-about-when-we-can-travel-again With social distancing guidelines in effect well into May in some states, many are wondering when they might be able to travel again. Optimistic experts predict summertime travel while others are projecting the return of travel to hit in 2021. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, has said that summer travel “can be in the cards, and I say that with some caution.” While a drastic slow in the spread of infections could lead to safe traveling conditions, a spike in cases could change that projection for the worse. In a survey, most Americans have said they would return to air travel after four to six months while more than half have said they’d wait a year or more before going on a cruise again. In fact, the CDC has extended its no-sail ban and has not indicated when cruises might be able to set sail again, the Los Angeles Times reports. Roger Dow, chief executive of the U.S. Travel Assn. has said that travel will rebound, but generally, it won’t happen until next year. Meanwhile, Alan X….

The Real Deal 04/02/20 CA Hotel Industry Sees 3,600 Job Cuts Amid COVID-19 Crisis 3,600 workers laid off over 4-day period in March By Matthew Blake https://therealdeal.com/la/2020/04/02/expedited-layoffs-mean-thousands-of-hotel-job-cuts/ A little noticed executive order by CA Gov. Gavin Newsom has accelerated layoffs in the state’s hotel industry — with pink slips issued recently to nearly 3,600 workers in March. The job cuts, which for now are officially reported as temporary layoffs, are perhaps the most tangible sign yet of California’s hotel industry in freefall amid the coronavirus crisis. Newsom announced on March 17 a partial suspension of the state’s Worker Adjustment Retraining and Notification Act, better known as the WARN law, which normally compels employers to give workers and the public 60-days notice before carrying out layoffs of 50 or more employees. Under the governor’s order, employers must still report mass layoffs to the state’s Employment Development Department. But companies can enact the layoffs immediately if the pink slips are the result of measures taken in response to the coronavirus, a new rule hotels were quick to utilize. “In my lifetime I have never seen damage as swift to the industry, plus with such an unknown end,” said Peter Hillan, spokesman for…

Santa Cruz Sentinel 03/30/20 Coronavirus: Bay Area Hotel Layoffs Might Just Be Start of Job Losses By George Avalos Coronavirus: Bay area hotel layoffs might just be start of job losses SAN MARTIN — At least 1,400 hotel workers in Northern California have lost jobs or been shoved into indefinite furloughs amid the coronavirus fallout, but these might be just a grim vanguard of further economic reductions. Hotel worker layoffs in the Bay Area and nearby regions total at least 1,431, according to new estimates by state labor officials, but several experts warn that the newly announced cutbacks are merely the beginning of widespread economic devastation in California’s crucial lodging and travel sectors. “This is only the start of the hotel layoffs,” said Alan Reay, president of Irvine-based Atlas Hospitality Group, which tracks the California lodging market. “The majority of hotels in California and nationwide are reducing operations or closing temporarily.” More than 400,000 jobs supported by the hotel sector or directly connected to hotel operations are expected to be cut in California, according to an Oxford Economics study released by the American Hotel & Lodging Association. “Those numbers may be conservative,” Reay said. Roughly 414,000 jobs, or a staggering…

Sacramento Business Journal 03/27/20 Coronavirus Fallout May Test Commercial Real Estate Industry’s ‘Extend and Pretend’ Limits Emily Hamann & Ben van der Meer https://www.bizjournals.com/sacramento/news/2020/03/27/coronavirus-fallout-may-testcommercial-real-estate.html The last time the U.S. economy was in crisis, terms such as “jingle mail” and “extend and pretend” became commonspeak among the thousands of men and women earning their keep in the commercial real estate sector. What’s unfolding today in the age of the coronavirus undoubtedly will add to that insider vocabulary, and then some. A Business Journals analysis of the commercial real estate market identified 4,600 properties securing $30 billion in commercial mortgage-backed securities, or CMBS, debt coming due in the next six months. With the global economy in a tailspin and nary a sign of it stabilizing, the likelihood those loans will be paid in full — whether through refinancing or property sales that can satisfy lenders — is slim. The shrapnel from this ticking time bomb will be absorbed in virtually every major metropolitan area in the country. In Washington, D.C., some $1.8 billion in CMBS debt secured by 67 properties is coming due by Sept. 30. In Los Angeles and Boston, the totals are $1.46 billion and $1.31 billion, respectively, and the…

San Diego Business Journal 03/17/20 2019 Was Solid Year for Hotel Sales By Tom York https://www.sdbj.com/news/2020/mar/17/2019-was-solid-year-hotel-sales/ San Diego’s hotel industry has been rolling along for the past decade. But how long will the good times last? Well, it depends, says Alan Reay, president of the Atlas Hospitality Group, which brokers hotel sales. The industry could be in for a rough night. “The clouds are on the horizon,” he said. Reay recently released Atlas’ annual 2019 Year-End California Hotel Sales Survey, which covers hotel property sales region by region in the state and touches upon the economics of the industry in the process. Overall 2019 was a solid year for hotel property sales, the report from the Irvine-based Atlas notes. Sales based on the price per room dipped 2.6 percent compared with 2018. “It’s obviously still a robust market,” he said. “But the question on a lot of owners’ minds is this: If we’re not at the peak, how close are we to it?” Reay said. Some of the other findings of Reay’s annual report: • Atlas’ annual survey found that total sales for San Diego hotel properties dropped to 20 from 27 in 2019, through the dollar amount jumped 82%….

The Orange County Register 03/09/20 How Coronavirus Burst California’s Tourism Bubble By Jonathan Lansner How coronavirus burst California’s tourism bubble California’s tourism bubble has burst, an economic victim of the coronavirus outbreak. It’s hard to chat about commerce when the key issue is the largely unknown scope and impact of a killer virus. But when financial markets are tanking, as they did again on Monday, and travel is slowing to a crawl, the monetary fallout seems fair game. Look at what’s at stake: A globe’s worth of folks come to California for pleasure and work. The rush created surprising and outsized business opportunities in and around tourism, an industry that was hammered by the Great Recession. Tourism, both statewide and globally, made a quick and strong rebound from the financial debacle of the late 2000s. Industry insiders and analysts alike certainly didn’t see the new consumer fervor for travel “experiences” coming. Also missed by the gurus was a solid revival in business travel, corporate expenditures once perceived as a dinosaur at risk in a modern age of communications. This stunning tourism turnabout flooded the industry with opportunities that were met with hard cash: Billions were spent on everything from new…

The Mercury News 03/05/20 Downtown San Jose Hotel Eyed Near Google Village, SAP Center, Henry’s By George Avalos Downtown San Jose hotel eyed near Google village, SAP Center, Henry’s SAN JOSE — A new hotel could sprout in downtown San Jose near Google’s proposed transit village, the SAP Center, and Henry’s World Famous Hi-Life restaurant, according to preliminary proposals being shown to city officials. The proposal for a hotel on West St. John Street near North Almaden Boulevard is being circulated by BPR Properties, a family-run company founded in 1973 that develops and manages hotels. Palo Alto-based BPR Properties envisions the development of a six-story hotel that would replace three houses located in the River Street Historic District in downtown San Jose. “The hotel would have 105 guest rooms and 41 parking spaces utilizing mechanical parking lifts to maximize the number of parking spaces,” BPR Properties stated in a document that was submitted for the city staff’s for early review and initial assessments. It’s possible that the project would require a historical preservation permit and a historic report, according to Laura Meiners, a San Jose city planner. A hotel at this location would appear to be well-suited for guests who…

San Francisco Business Times 03/04/20 The Coronavirus Has Already Cost the City 150,000 Hotel Nights By Alex Barreira https://www.bizjournals.com/sanfrancisco/news/2020/03/04/the-coronavirus-has-already-cost-the-city-150-000.html   Coronavirus-related cancellations at the Moscone Center have already cost hotels in the city about 150,000 room nights, according to convention officials and Business Times estimates. At least six large scheduled meetings have been canceled at the city’s convention center, with some meeting organizers opting to hold virtual conferences so attendees do not have to travel and congregate in large groups. Officials say it’s too early to quantify the economic impact so far, but the loss of those tens of thousands of attendees is expected to have a ripple effect across the city, with restaurants and other tourist-related businesses expected to suffer revenue declines and potentially smaller profits. “It’s going to be very, very painful,” said Laurie Thomas, executive director of the Golden Gate Restaurant Association, whose membership includes hundreds of eateries in the city. She said food businesses she’s spoken with have lost “easily over $1 million” just in the week since event cancellations began to gather pace. “I thought I’d never have to plan for this.” As of Wednesday night, those cancellations include the Game Developers Conference, Google Cloud…