Atlas in the news

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…

Bisnow 12/03/19 LA Deal Sheet By Joseph Pimentel https://www.bisnow.com/los-angeles/news/deal-sheet/la-deal-sheet-102037 The Ace Hotel in downtown Los Angeles has reportedly been sold in a $117M deal. An undisclosed buyer has acquired the 182-room hotel at 929 South Broadway from Parks Hotels & Resorts, according to the Los Angeles Business Journal. The price is one of the highest prices per room paid in downtown Los Angeles, Atlas Hospitality Group President Alan Reay said to the LABJ. Originally built in 1927 as the tallest building in Los Angeles, the building once served as United Artists’ film studio formed by Charlie Chaplin, Douglas Fairbanks and Mary Pickford. The building changed hands over the years and was once used as a church. Greenfield Partners acquired the property from the Wescott Christian Center for $11M in 2011, according to commercial real estate data site Reonomy. Greenfield renovated the building into the Ace Hotel. Greenfield sold the building in 2015 to Chesapeake Lodging Trust for $103M. Parks Hotels & Resorts acquired Chesapeake Lodging Trust earlier this year in a $2.7B deal.

The Orange County Register 12/04/19 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. American Banker reports that hotel specialists Ohana Real Estate Investors from Redwood City acquired to 400-room luxury hotel from Denver-based KSL Capital Partners in October for a reported $497 million. Ownership of the blufftop resort, across the Pacific Coast Highway from the Pacific Ocean, has taken some odd twists in its 18 years. The Makarechian family spent upwards of $240 million on the property that opened in 2001 with under the “St. Regis brand.” In 2008, as the financial meltdown was in full boil, the hotel was the center of some ugly press when it hosted an executive retreat for American International Group Inc. just days after the insurer had gotten a federal bailout. The resort’s owners then defaulted on $300 million of its loans in 2009 amid the Great Recession downturn in tourism. For a period, it seemed nobody wanted to…

San Diego Business Journal 11/18/19 Is San Diego Tourism Hitting Peak Hotel? By Tom York https://www.sdbj.com/news/2019/nov/18/san-diego-tourism-hitting-peak-hotel/ Ask the local hotel industry experts, and they’re happy to tell you. San Diego’s hospitality sector has enjoyed an unprecedented period of prosperity over the past decade. They can boast about the high occupancy rates and the high price they can charge for a room. However, those same experts are starting to worry when good news will turn sour. “The hotel industry has been through nine years of record growth,” said Joe Terzi, CEO of the San Diego Tourism Authority, which is spending close to $30 million each year on various marketing activities to lure travelers to the region. 84% Occupancy Rates In Peak Periods Occupancy rates for Central San Diego, for example, have hit record or near record levels, running as high as 84 percent in peak periods. “But we’re now where things are somewhat concerning because of the national political situation and several other issues, such as the strong dollar,” said Joe Terzi, president and CEO of San Diego Tourism Authority. “We think the next several years are going to be challenging.” He said cracks already began appearing in the first quarter…

Los Angeles Business Journal 11/29/19 Los Angeles Ace Hotel Sells for $117M By Hannah Madans https://labusinessjournal.com/news/2019/nov/29/ace-hotel-sells-117-million/ The Ace Hotel Downtown Los Angeles, which helped spur the area’s revival when it opened five years ago on Broadway, has sold for $117 million to an unnamed buyer. The deal by Ace owner Parks Hotels & Resorts Inc. is turning heads, especially because the sale price amounts to $643,000 per room for the 182-room hotel. “That’s one of the highest prices per room paid in downtown Los Angeles,” said Atlas Hospitality Group president Alan Reay. “That says a lot about what people think of the future of downtown L.A. and how they expect the hotel market to perform in the next five to 10 years,” Reay added. “It’s interesting to see that kind of price in light of all the new rooms that are planned or under construction.” Parks Hotels had only recently taken ownership of the property. In September, the group closed its acquisition of Chesapeake Lodging Trust for $2.5 billion, which gave Parks Hotels full ownership of the Ace and 17 other hotels, including the Hilton Checkers Los Angeles in downtown, the Hotel Indigo San Diego Gaslamp Quarter and a handful…

Los Angeles Business Journal 11/07/19 Leasehold Interest in Hotel Near LAX Sells for $50 Million By Hannah Madans https://labusinessjournal.com/news/2019/nov/07/leasehold-interest-hotel-near-lax-sells-50-million/   Sunstone Hotel Investors, Inc. has sold a leasehold interest in the Courtyard by Marriott Los Angeles near LAX for $50 million, according to a third-quarter earnings report. The property has 187 hotel rooms. The purchase price amounts to roughly $267,000 per room. “This transaction not only makes sense financially, but further concentrates our 20-hotel portfolio in Long-Term Relevant Real Estate,” John Arabia, the company’s president and chief executive said in a statement. “We expect to distribute the gain on this sale to our stockholders through our fourth quarter dividend. Additionally, we retain significant liquidity that provides us with the ability to create long-term shareholder value through the continued repurchases of our common stock or through the acquisition of additional Long-Term Relevant Real Estate.” The buyer’s name was not disclosed. Alan Reay, president of Atlas Hospitality Group, said a private company owns the land under the hotel. When ground leases — where one group owns the land and another the building on the land — take place, Reay said they can cause some issues. “It makes it a bit more difficult…

CoStar 10/08/19 Investors to Pay $249 Million, Just Below Luxury Price, for Midprice West Coast Hotels REIT, Singapore Sovereign Wealth Fund Partner on Hotels That Can Withstand a Slow Economy By Clare Kennedy https://product.costar.com/home/news/7587818 Real estate investment trust Summit Hotel Properties Inc. is paying top dollar for four West Coast hotels that are relatively modest size rather than large-scale, full-service luxury hotels popular recently with investors, a move that could signal demand for budget-friendly brands that may hold up in any economic downturn. Summit, based in Austin, Texas, said that it has agreed to pay $249 million for two hotels in California’s San Francisco Bay Area and two in Portland, Oregon, through its recently formed joint venture with GIC, the sovereign wealth fund of Singapore. Half the portfolio is run under the Residence Inn by Marriott flag, and the other half are Hilton Garden Inns, both of which are limited service brands. According to CoStar records, the present owner of the portfolio is BRE Select Hotels Corp., a Brooklyn, New York-based real estate investment trust that focuses on upscale hotels that are run under either Hilton or Marriott brands. The REIT is controlled by Blackstone, a New York-based private equity…

Los Angeles Business Journal 09/27/19 Hilton Leaves His Mark REMEMBRANCE: LA icon influenced more than hotels By Hannah Madans https://labusinessjournal.com/news/2019/sep/27/hilton-leaves-his-mark/ William Barron Hilton, who died Sept. 19 at his home in Los Angeles at the age of 91, had an outsized impact on the city’s business community. The son of hotel mogul Conrad Hilton, he initially eschewed the family business, acquiring a citrus distribution company at age 19. Hilton would eventually assume the reins of his father’s hotel company, where he would transform the hotel chain and, in the process, the industry itself. “I don’t think you can say enough about his impact on the hotel business. Hilton is a huge name in the hotel business in the U.S. and worldwide,” said Alan Reay, president of Atlas Hospitality Group. Reay added that Hilton became known for the “quality of their assets” under his leadership. But Hilton would also make his mark on the business landscape in a number of other ways, ranging from the use of innovative real estate tools to remaking professional football. Here’s a closer look at Hilton’s legacy and some of the areas where he had a lasting impact. In 1959, after oil tycoons Lamar Hunt and…

Sacramento Business Journal 10/02/19 Holiday Inn Express in El Dorado Hills Sold for $21 Million By Emily Hamann https://www.bizjournals.com/sacramento/news/2019/10/02/holiday-inn-express-in-el-dorado-hills-sold-for-21.html A Holiday Inn Express in El Dorado Hills fetched a high price when it sold last month. The 93-room hotel in the El Dorado Hills Town Center sold for $21 million, or $225,806 per room. “This Holiday Inn Express is probably one of the nicest, if not the nicest, well-constructed Holiday Inn Expresses that my firm has ever worked on,” said Justin Myers, vice president of Atlas Hospitality Group, who helped broker the deal. Holiday Inn Express is among the brands owned by Atlanta-based InterContinental Hotels Group (NYSE: IHG). Atlas Hospitality brokered the previous deal when the hotel was last sold for $14.4 million in 2015. The high sale price of the property is another sign of the booming hotel industry in the Sacramento area. “The numbers justify the price per room and the purchase price because the property was performing very well,” Myers said. According to data from Atlas Hospitality, the median hotel sale price in California was $130,025 per room in the first half of the year, which is up 146% over the the last 10 years. Occupancy rates…