Atlas in the news

By Roger Vincent Staff Writer  June 21, 2024 1:42 PM PT The former Ace Hotel in downtown Los Angeles, which helped lead an economic revival on a historic stretch of Broadway a decade ago, has reopened as a minimal-service operation akin to Airbnb, following a strategy that has become increasingly common for struggling hotels in recent years. Now called Stile Downtown Los Angeles by Kasa, the 1920s-vintage hotel tower has resumed limited operations after shutting down nearly six months ago. Downtown hotels were particularly hard-hit by the pandemic, and some have changed owners or operators. Ace Hotel Group had operated the 182-room hotel near Broadway and Olympic Boulevard since it opened in 2014, even as its ownership changed twice over the years. The chic brand made the Ace a destination for travelers as well as local residents who patronized its buzzy rooftop bar and restaurants. South Korea-based AJU Continuum, which bought the hotel in 2019, announced last week that it had brought in Kasa Living Inc. to operate the property. Kasa, which is based in San Francisco and has a national presence, “offers the consistency of a major hotel chain with the convenience and character of a modern short-term rental,” AJU Continuum…

Marriott International will begin day-to-day management on July 1 By JONATHAN LANSNER | jlansner@scng.com | Orange County Register PUBLISHED: May 24, 2024 at 9:15 a.m. | UPDATED: May 24, 2024 at 1:09 p.m. The Irvine Co. will turn over day-to-day management of its Resort at Pelican Hill to Marriott International, with the luxury hotel eventually joining the St. Regis brand. The Newport Beach oceanview resort — with 204 rooms, 128 villas and two golf courses—  is the Orange County real estate giant’s only remaining hotel. It has been run independently of any chain since its opening in 2008. Irvine Co. announced that the operational switch, which does not change Irvine Co. ownership of the resort, begins July 1. The move was first reported by The Real Deal. Irvine Co. added that Marriott “is committed to retaining the majority of our resort associates.” The company also said the property will join Marriott’s high-end St. Regis hotel network “at a later date.” The move was made after a year’s “strategic review of the property and its operations, meeting with hospitality experts from around the world to explore how to further enhance the five-star experience that makes the resort a sought-after destination for our guests and our local community,” Irvine Co. said. The…

HANNAH WELK | MARCH 22, 2024 The Residence Inn in Manhattan Beach has sold for $68 million. Jones Lang LaSalle Inc. represented the seller, Washington Holdings, in the offloading of the 176-room property. Land and Houses USA Inc. purchased the asset. Twenty Four Seven Hotels will manage the property. “The addition of Residence Inn by Marriott Manhattan Beach to our portfolio continues the expansion of our management footprint throughout California, offering a model that’s flexible and fast on its feet with unparalled area operational expertise,” the company wrote in a LinkedIn post. It’s been a difficult time for hotel sales. In California, sales volume fell by more than 56% year over year, according to data from Atlas Hospitality Group. The median price per room was down roughly 1% year over year statewide. In Los Angeles County, hotel transactions declined 55% year over year and the total dollar volume spent decreased nearly 36% year over year, Atlas reported.

By Sarah Klearman and Alex Barreira – San Francisco Business Times | Mar 14, 2024 Updated Mar 14, 2024 5:50pm PDT This week Westbrook Partners was served a notice of default for a $72.5 million loan tied to 222 Sansome St., the home of the Four Seasons San Francisco at the Embarcadero. Westbrook, which acquired the 155-key hotel property in 2019 for $126.6 million, or about $816,000 per room, is behind more than $3.15 million in payments on the loan, per a notice of default recorded for the property March 3. The Florida-based developer has not made its monthly payment on its loan since December, per the notice, which states that Westbrook has 90 days to become current on its loan. If the investor fails to do so, its lenders could move to foreclose on the property, which occupies the top 11 stories of the 48-story tower at 345 California St. but is considered a separate property and employs the 222 Sansome address. Notices of default typically constitute the first step in the foreclosure process, though in some cases loan sponsors like Westbrook purposefully default on their loans as a way to commence negotiations with their lenders. Neither Westbrook nor…

Sumitomo Realty & Development completes a $14 million renovation of the prestigious Park Hyatt Los Angeles, sparking market speculations and impacting the hospitality industry. Sakchi Khandelwal |  28 Feb 2024 14:29 EST Sumitomo Realty & Development has recently completed a lavish $14 million renovation of the Park Hyatt Los Angeles, a landmark hotel situated in the bustling heart of Century City. Opened in 1988, this prestigious hotel boasts a four-diamond rating from Mobil AAA, reflecting its high standards of luxury and service. Despite its newly refurbished state, there is speculation about its future ownership, stirring interest in the hospitality sector. Comprehensive Upgrades and Design Innovation The renovation project has transformed the Park Hyatt Los Angeles, encompassing extensive upgrades to its 366 guest rooms and a complete redesign of the lobby. The architectural firm Culpepper, McAuliffe, Meaders Inc. based in Atlanta led the redesign, infusing modern aesthetics while enhancing the hotel’s luxurious ambiance. This significant investment underscores Sumitomo’s commitment to maintaining the hotel’s prestigious status and appeal to both business and leisure travelers. Market Speculations and Strategic Considerations Despite the fresh upgrades, Alan Reay, president of Atlas Hospitality Group, suggests that the hotel may be put up for sale. This speculation…

Similar to what’s happening in the housing market, high interest rates are depressing the volume of hotel sales, which in San Diego County recorded their second biggest decline in 15 years. BY LORI WEISBERG | FEB. 29, 2024 5:30 AM PT San Diego made history last year when the upscale Inn at Rancho Santa Fe sold for a stunning $1.2 million a room — even as the volume of hotel transactions experienced one of the biggest declines the county has seen in 15 years. The pricey sale of the 85-room inn belies a distressing trend seen not just locally but across the hotel real estate market statewide: a sharp downturn in sales fueled largely by high interest rates and a skittishness among lenders to finance costly transactions. Last year marked the second steepest decline since 2009 for both the number of hotel transactions and overall dollar volume in San Diego County, according to a new statewide report released by the Orange County-based brokerage, Atlas Hospitality Group, which tracks sales throughout California. The rising cost of financing is concerning enough that it has some experts — including Atlas Hospitality — warning about the looming threat of hotel foreclosures as large debt repayments come due. While…

CHERYL SARFATY | THE NORTH BAY BUSINESS JOURNAL | February 19, 2024, 11:58AM Where in California do you think the most expensive hotel sale took place last year? If you said Sonoma County, you would be correct. In September, the Farmhouse Inn, a 25-room luxury property in Forestville, sold for $32 million, commanding $1,280,000 per room, according to Atlas Hospitality Group, a Newport Beach-based real estate brokerage firm that specializes in hotel properties across California. Foley Entertainment Group in September purchased a majority stake in the Farmhouse Inn from siblings Joe and Catherine Bartolomei. The duo retained 25% ownership of the six-acre property they purchased in 2001, The Press Democrat reported at the time. Atlas recently released its 2023 year-end hotel surveys for the state, one summarizing hotel sales, the other reviewing hotel development plans. The group also releases midyear surveys. Most of the hotel development plans will never see the light of day, said Alan X. Reay, president and founder of Atlas. “Lenders are currently burdened with loans that are maturing and borrowers are unable to pay off, which has them currently shut down on new construction loans,” he said. Markets where new hotels have a remote chance of coming to…

Hotel Sales Sustained a Dismal 2023 BY BRYNN SHAFFER | FEBRUARY 19, 2024 California hotel sales plummeted last year, according to Atlas Hospitality Group, which recently released its 2023 end-of-year hotel sales survey. “The big jump-out is the dramatic or steep decline in number of transactions and dollar volume,” said Alan Reay, president of Atlas Hospitality Group, who’s been tracking California hotel sales for more than 20 years. “This is the steepest decline we’ve seen in the last 20-plus years, except for one year, and that was 2009.” Last year, individual hotel sales were down 45% over 2022 statewide, illustrating the second largest percentage decline in the last 15 years. Sales volume declined by 56%, the second steepest decline in sales volume in the last 15 years as well. For Reay, the biggest culprit behind these staggering numbers was the increase in interest rates. “What we have now is a disconnect between what buyers are willing to pay and what sellers want to sell for,” he said. “And that’s because sellers are used to what prices were in 2022 when interest rates were 50% below what they are today.” And within Los Angeles specifically, Measure ULA – the one-time real estate transfer…

BY STEFANI C. O’CONNOR | FEBRUARY 13, 2024 Politics, economics, taxes, lending environment shape lodging landscape in the City of Angels. LOS ANGELES — As a city bullish on enhancing itself as a tourist mecca — ostensibly to ensure its lodging base flourishes—Los Angeles as a destination for hotel investors presents more as a mix of select opportunities and potential red flags. On one hand, market confidence-builders include a phased [ongoing] $30 billion investment to modernize Los Angeles International Airport (LAX); the opening this year of the L.A. Clippers new home, the Intuit Dome; the debut next year of the [George] Lucas Museum of Narrative Art; and subsequently, the FIFA World Cup and NBA All-Star Game (2026); Super Bowl LXI (2027); and the Summer Olympic and Paralympic Games (2028). In contrast, area politics and economics have been among key concerns for both existing and potential hotel investors of late, as much of it toggles to alleviating the plight of the homeless and broadening the scope of affordable housing in L.A. “Los Angeles, other than downtown, has been a historically under-supplied market; barriers to new supply are much higher today,” said Daniel Peek, president and chief operating officer at Hodges Ward Elliott. He…

Investors are not in a hospitable mood as trade value drops by 56%. By Jack Rogers | February 15, 2024 at 06:53 AM Investment sales in hotels plunged by more than 56% in California in 2023 as investors kept their powder dry waiting for better market conditions—the steepest cliff-dive for the hospitality sector in the Golden State since the global financial crisis. Hotel transactions in California totaled $3.76B last year, less than half of the $8.6B in hotel sales volume in 2022. The 2023 tally is the lowest since 2009, when sales of hotels in the Golden State dropped by 75%. The plunge in hotel sales was more pronounced in Southern California, which saw its 2022 total of $5.8B pared to $2.3B in 2023. Sales in Northern California dropped to $1.45B last year, compared to $2.8B the previous year, according to the annual California Hotels Survey from Newport Beach-based Atlas Hospitality Group. The contraction looks worse when you consider the fact that SoCal’s total includes a $760M transaction: the foreclosure sale of the Fairmont Century Plaza Hotel. The largest deals in Northern California included a May transaction in which Redwood City-based Ohana Realty bought the 276-room Claremont Hotel Club & Spa in the…

Margaret Jackson | Mon, Feb 12, 2024, 9:43 AM PST Hotels may be performing better than they were during the pandemic, but that’s not propelling sales of hospitality properties any higher. Individual hotel sales in California plunged 45%, from 483 in 2022 to 265 in 2023, according to a CoStar report on Atlas Hospitality Group’s annual year-end California Hotels Survey. Dollar volume dropped 56.3% to $3.75 billion — the second-largest year-end drop in 15 years. In 2009, there was a 75% decline. “If I’m operating today, and my hotel is operating well, I’m not going to sell in today’s market because I’m used to what the prices were 12 to 18 months ago,” Atlas Hospitality Group President Alan Reay told CoStar. The cost of capital is what’s keeping sales stagnant. Higher interest rates can cause a property’s valuation to decline by millions of dollars. The pandemic brought higher sale prices because of the combination of lower interest rates and a ton of built-up capital. Federal regulators kept the number of distressed properties down by allowing lenders to be more flexible. Stimulus dollars distributed to individuals and businesses also helped. “There was a tremendous amount of tax money pummeled into the economy so…

Today’s Headlines: Eric Danziger Retires as CEO of Braintree Group; Weather Patterns Disrupt Travel Globally; California Hotel Sales Drop by 45%; Majority of Hotels Report Staffing Shortages; FIFA Reveals 2026 World Cup Locations By Dana Miller | Hotel News Now | February 6, 2024 | 7:29 AM 1. Eric Danziger Retires as CEO of Braintree Group Hotel industry C-suite veteran Eric Danziger, CEO of Braintree Group and Resolute Road Hospitality, is retiring but will remain active on the board of directors. He has more than 50 years of hospitality industry experience. Danziger joined commercial real estate investment company Braintree Group in 2022. The company rebranded its Braintree Hospitality arm as Resolute Road Hospitality in 2023 to expand into third-party management. Danziger previously served as CEO of Trump Hotel Group for six years, joining the company in August 2015. Before that, he was president and CEO of Starwood Hotels, president and chief operating officer of Carlson Hotels Worldwide and president and CEO of Wyndham Hotel Group. 2. Weather Patterns Disrupt Travel Globally Travel across China for the start of the Lunar New Year holiday this weekend is already facing complications from snow and freezing rain. This year was projected to achieve a return to normal levels of…