Atlas in the news

Bisnow 01/13/20 Hilton Hotel in Downtown San Jose Is Sold for More Than $117 Million Hotel tower next to downtown San Jose convention center changes hands By George Avalos Hilton Hotel in downtown San Jose is sold for more than $117 million SAN JOSE — The iconic Hilton Hotel in downtown San Jose has been sold, real estate brokers said Monday. The 18-story hotel tower was sold for $117.55 million, according to JLL, a commercial real estate firm that arranged the sale of the prominent lodging facility. “Hilton San Jose is proximate to a plethora of Fortune 1000 corporations, including some of the most recognizable names in technology today,” said John Strauss, a JLL senior managing director. The hotel is directly connected via a sky bridge to the San Jose McEnery Convention Center in the downtown of the Bay Area’s largest city. JLL noted that the transaction has occurred at the same time that a major development boom has begun to sprout in downtown San Jose. “San Jose is in the midst of an urban renaissance with millions of square feet of new office space in the pipeline,” Strauss said. The hotel includes 18,000 square feet of meeting and event…

Bisnow 01/13/20 California Sets New Record with Hotel Openings in 2019 By Joseph Pimentel https://www.bisnow.com/orange-county/news/hotel/report-california-sets-record-for-the-number-of-hotel-openings-in-2019-102506 California last year set a state record for the number of hotel openings in a single year, a new report says. Atlas Hospitality Group, an Orange County-based brokerage firm specializing in the hotel industry, reported that the Golden State saw 92 hotels open, totaling 11,795 rooms in 2019. The last time the state had a similar boom was in 2017, when 66 hotels opened, totaling 10,794 rooms, according to Atlas Hospitality President Alan Reay. “California has one of the strongest economies, not only in the U.S. but the world,” Reay said in an interview with Bisnow. “Investors, both domestic and international, all see the state as a great long-term investment. Corporate travel coupled with the huge tourism business gives California a very diverse business base.” The Southern California region, which includes Los Angeles, Orange and San Diego counties and the Inland Empire led the way with 46 hotels opening totaling 4,534 rooms. In 2019, San Diego saw 10 hotels open with 1,668 rooms, a 36% increase in room numbers year-over-year. Los Angeles County had nine new hotels with 1,167 total rooms open in 2019, a…

CoStar 01/10/20 Silicon Valley Tech Boom Creates Surge in Hotel Development Santa Clara County Leads California for 2019 Room Openings, With More on the Way By Lou Hirsh Development https://www.costar.com/article/1838448630/silicon-valley-tech-boom-creates-surge-in-hotel-development California’s Santa Clara County led the state in construction of new hotel rooms in 2019, thanks largely to business travel demand fueled by Silicon Valley’s booming technology industry, according to a new study. Brokerage and research firm Atlas Hospitality Group found that in a year that set a state record for new hotel rooms opened, at 11,795, the heart of Silicon Valley led all regions with 1,919 rooms opened at 12 properties. “It is one of the most desirable markets in California for hotel developers, based almost 100% on the strength of the tech market,” Atlas President Alan Reay told CoStar News, adding the general trend is likely to continue well into 2020 and beyond. Santa Clara County is home to San Jose, the nation’s 10th-most populous city, and several suburbs hosting fast-expanding operations of the world’s largest technology companies, including Google, Facebook, Apple and Netflix. It is the core of a larger region of Northern California known as Silicon Valley, among the world’s largest hubs for technology companies and…

San Fernando Business Journal 01/01/20 Study: 2019 a Record Year for Hotel Development By Michael Aushenker http://sfvbj.com/news/2020/jan/10/study-2019-record-year-hotel-development/   The Atlas Hospitality Group 2019 Year-End California Hotel Development Survey found last year set a new record for the number of California hotel rooms opened. Some 92 new hotels opened in 2019 with 11,795 rooms and another 212 hotels under construction. In the San Fernando Valley, most of the activity is around Warner Center. Woodland Hills has five hotels in the planning stage – including two by Westfield – and a Home 2Suites under construction at 5957 N. Variel Ave. In Camarillo, there is one hotel in the planning stage, a Hotel2Suites, and another Embassy Suites, both on the Mian Cos.’ property at Las Posas Road and 101 freeway, under construction. Sherman Oaks has two hotels in the planning stages while Thousand Oaks has another of pair in development. In the Tri-Cities, Burbank has seven hotels in the planning stages and one – the AC Hotel Burbank – under construction. Glendale has a total of eight in the planning stage. Doran Hotel has two hospitality sites in the planning stages in Glendale. The Santa Clarita Valley has four hotels in the planning…

Orange County Business Journal 01/09/20 Hotel Development Strong By Katie Murar https://www.ocbj.com/news/2020/jan/09/hotel-development-strong/ Three hotels opened in Orange County last year, one of which was the largest to open in the state in 2019, according to a year-end survey by Irvine-based Atlas Hospitality Group. The 352-room Cambria Hotel Anaheim Resort Area opened last summer. The other openings were a 178-room and 102-room Hampton Inn & Suites in Anaheim and Buena Park, respectively. The 632 new rooms in the county mark a 42% jump from the year prior. There are currently 17 hotels with 3,166 rooms under construction, flat growth year-over-year, the largest of which is the 613-room Westin Anaheim Resort, a $250 million project led by Wincome Group. There are an additional 69 hotels with 11,048 rooms in planning, up 7% from 2018. Statewide, hotel openings hit a new record in 2019, with 34 properties delivering 4,773 rooms. “Despite the increased cost of construction, California hotel developers continue to build, and lenders continue to provide financing,” the report said. “This is driven in large part by the premium owners can charge for new rooms versus older competitors, along with the ultimate premium they can drive on sales/appraised value.”

Orange County Business Journal 12/23/19 High Prices, Seller’s Market for OC Hotels By Katie Murar https://www.ocbj.com/news/2019/dec/23/2020-preview-hospitality-tourism California hotel sales hit record highs in 2019, with Orange County experiencing its priciest hotel sale to date. The Monarch Beach Resort traded for a record price of $497 million, or $1.2 million per room. That per-room price trails only the 2015 sale of the Montage Laguna Beach at $1.4 million per room among reported local deals. Through the first half of 2019, California hotel sales hit a record median price per room at $130,025, which is up 13% from the year-ago period, and up 146% over the last 10 years, according to Atlas Hospitality Group. Will 2020 continue that momentum? National data indicates that hotel supply is growing, as are room revenues, but at a slower clip. “California continues to post some very impressive sales numbers. This has many experts wondering when the market will slow down,” said Alan Reay, president of Atlas Hospitality Group. “As long as the economy remains strong and interest rates remain low, prices should continue to go up. However, if demand slows, the supply of new hotel rooms coming online could start to impact price appreciation.” It’s a…

CoStar 12/26/19 Big Beverly Hills Hotel Deal Could Be Sign of More to Come in 2020 London’s Maybourne Buys California Property for Price Topping $2 Million per Room By Lou Hirsh https://product.costar.com/home/news/shared/1290861420 More big trophy hotel deals could be ahead in 2020, after London-based Maybourne Hotel Group acquired Montage Beverly Hills near Los Angeles for $415 million. It’s the highest price per room ever paid for a hotel in California at more than $2 million, according to brokerage Atlas Hospitality Group. The 201-key Montage, located at 225 N. Canon Drive in a part of Beverly Hills best known for the nearby Rodeo Drive luxury retail corridor, is Maybourne’s first U.S. acquisition. The seller was Redwood City, California-based Ohana Real Estate Investors, led by Principal Pierre Omidyar, the billionaire founder of auction site eBay. Atlas President Alan Reay, whose brokerage and research firm was not directly involved in the transaction, said the deal is a very good indicator of how trophy assets are valued, especially by overseas investors, for their location, revenue generation and overall luxury quality. “It says a lot about how international investors view the U.S. in terms of safety and for investment returns over the long term,” Reay…

Los Angeles Daily News 12/27/19 Montage Beverly Hills bought for $415 million, or $2.1 million per room Busy year-end for the folks at Ohana Real Estate Investors. By Jonathan Lansner Montage Beverly Hills bought for $415 million, or $2.1 million per room Let’s just say it’s been a busy year-end for the folks at Ohana Real Estate Investors, as the hotelier from Redwood City has traded California five-star resorts like everyday folks swap Monopoly properties. In October, Ohana bought the 400-room Monarch Beach Resort in Dana Point for $497 million. Now we learn Ohana has sold the 201-room Montage Beverly Hills to a British hotel operator at what’s said to be a California record price per room. Maybourne Hotel Group paid $415 million, or $2.1 million per room, said Alan Reay, president of the Atlas Hospitality hotel consultancy. Ohana isn’t talking, but Reay guesses the close timing of the two deals was to shelter gains from the Beverly Hills property that the firm built in 2008. Plus, Reay notes Ohana sold for over $2 million per room and bought a coastal asset at $1.2 million per room. Or, roughly speaking, “double the rooms, for almost the same price.” “I also…

The Real Deal 12/24/19 Qatar-backed Hotel Firm Buys Montage Beverly Hills in Record Deal On a per-key basis, deal is one of the biggest hotel transactions in US history By Pat Maio https://therealdeal.com/la/2019/12/24/qatar-backed-hotel-firm-buys-montage-beverly-hills-in-record-deal/ Qatar-backed hotel firm Maybourne Hotel Group has added the exclusive Montage Beverly Hills hotel to its portfolio, in a deal that values the 201-key property at over $400 million. Alan Reay, president of Atlas Hospitality Group, told The Real Deal that the deal is a record breaker in California, with rooms at the luxury resort now valued at $2 million. The Montage sale beat out the previous record of $1.7 million per room back in 2015 when L.A. businessman David Geffen sold the 47-room Malibu Beach Inn for $79.9 million to the Mani Brothers, according to Reay. Maybourne – which owns London luxury hotels Claridge’s, the Connaught and the Berkeley – announced the Montage Beverly Hills acquisition on Saturday, according to Bloomberg, which first reported the sale. The seller was Ohana Real Estate Investors, which developed the hotel back in 2008. Financial terms were not disclosed, and Maybourne and Ohana both declined to comment. The deal is the first in the U.S. for London-based Maybourne, which appears…

Los Angeles Business Journal 12/23/19 Montage Beverly Hills Sells for Estimated $415 Million By Hannah Madans https://labusinessjournal.com/news/2019/dec/23/montage-beverly-hills-sells-415-million/ The prestigious Montage Beverly Hills hotel has sold for the estimated price of $415 million to a British hotel company. Maybourne Hotel Group announced that it had purchased the famed property, the company’s first hotel outside of London, but did not provide a purchase price. Alan Reay, president of Atlas Hospitality Group said the purchase price for the 201-room Montage was $415 million. That makes it the highest per-room sale price this year and a record per-room price in California. “It’s Beverly Hills,” Reay said. “It is one of the most desirable areas in the entire United States. (There are) huge barriers to entry (in the market), it is a trophy hotel, and it’s purchased by a company out of London that really only specializes in trophy hotels.” Maybourne Hotel Group, formerly known as the Savoy Hotel Group, operates Claridge’s, The Connaught and The Berkeley in London. Maybourne will announce plans for changes to the Beverly Hills property in 2020. In a press release, Maybourne said the acquisition was part of a global expansion strategy. “We are excited to have our first property…

San Francisco Chronicle 12/15/19 Took More Than Scary Streets to Push Oracle OpenWorld to Las Vegas By Phil Matier https://www.sfchronicle.com/bayarea/philmatier/article/Took-more-than-scary-streets-to-push-Oracle-14905111.php Oracle’s decision to move its annual giant OpenWorld conference to Las Vegas next year sent a $64 million shock wave through the city’s tourism circles, but insiders say they’d seen it coming for some time. The software giant cited San Francisco’s high costs and poor street conditions — a polite way of saying bad behavior by sidewalk residents — as the reason behind the exit. It’s not the first time Oracle raised the issues. “The afternoon (before) Mayor Ed Lee passed away, representatives from Oracle were in his office expressing some of the same concerns,” San Francisco Travel CEO Joe D’Alessandro said. “The mayor committed to help clean up and improve security” around Moscone Center. But it wasn’t just the scary nature of San Francisco’s streets that led to Oracle’s exit. The rising cost of holding a convention in the city was also a factor. For example, the average cost of a San Francisco hotel room this year is $254, compared with $129 in Las Vegas, according the hotel brokerage firm Atlas Hospitality Group. “Our hotels are not overcharging,” D’Alessandro…

The Orange County Register 12/05/19 Dana Point’s Five-star Monarch Beach Resort Sold for $497 Million By Jonathan Lansner Dana Point’s five-star Monarch Beach Resort sold for $497 million The five-star Monarch Beach Resort in Dana Point — where an average night will cost you $380— has changed ownership again, this time selling for nearly a half-billion dollars. The decade’s tourism boom has made hotels extremely tradable. Hotel specialists Ohana Real Estate Investors from Redwood City acquired the 400-room luxury hotel from Denver-based KSL Capital Partners in October for $497 million, according to a report from financial analysts at DBRS Morningstar. The blufftop resort, across the Pacific Coast Highway from the Pacific Ocean, sits on 162 acres — plus a 6.11-acre private beach club. Its portfolio of top-shelf offerings includes eight eateries, four retail shops, 120,500 square feet of meeting space, a full-service spa, three swimming pools, not to mention its own 18-hole golf course. But at $1.24 million per room, is all that glitz a good value? Hotel analyst Alan Reay at Atlas Hospitality says in the past two decades there have been 24 California hotels sold at a price above $1 million per room. Only the 2015 sale of…