Atlas in the news
Pacifica in $44M Hotel Sale
Orange County Business Journal 09/22/15 Pacifica in $44M Hotel Sale By Paul Hughes http://www.ocbj.com/news/2015/sep/22/pacifica-44m-hotel-sale/ Irvine-based Pacifica Hotels sold the Hilton Garden Inn Marina del Rey to Chatham Lodging Trust in West Palm Beach, Fla., for $44.5 million. The price works out to about $332,000 per room for the 134-room property. About half the purchase price—$22.6 million—came through the assumption of debt on the property, Chatham said. Pacifica bought the hotel, then called the Marina International Hotel, for about $20.2 million in May 2006. It renovated the property and relaunched it under the Hilton name in June 2013. It owns four other hotels in the Marina del Rey area—Marina del Rey Hotel, Jamaica Bay Inn, Inn at Marina del Rey and Inn at Venice Beach—each of which it has renovated. “We will continue to strategically develop and reposition assets in premier destinations,” said Pacifica Hotels Chief Executive Matt Marquis in a statement. “This sale is another example of the premium prices being achieved for well located, top branded hotels in the marketplace today,” said Alan Reay, president of Atlas Hospitality Group in Irvine. Pacifica is owned by Invest West Financial Corp. in Santa Barbara. It owns and operates some 30 properties…
Meet the Downtown San Jose Hotel Being Built Without Many People Knowing About It
Silicon Valley Business Journal 09/09/15 Meet the Downtown San Jose Hotel Being Built Without Many People Knowing About It By Nathan Donato-Weinstein http://www.bizjournals.com/sanjose/news/2015/09/09/meet-the-downtown-san-jose-hotel-being-built.html If you live or work in downtown San Jose, you may have walked by a new hotel under construction and not even realized it. For the last several months — and somewhat under the radar — construction crews have been swarming 100 E. Santa Clara St. to convert the 27,000-square-foot office building to a 44-room hotel. Folks, meet “Hotel Clariana” (the name is for the street), which an owner’s representative described to me last week as an “upscale” boutique hotel. “Everything’s going to be updated,” said Tina Phan, of ownership group RSTP Investments LLC. “It’s not like other hotels. We want to have a really nice place for business people and families.” RSTP acquired the five-story building back in 2009 through a deed in lieu of foreclosure after the previous owner defaulted on a $4.8 million loan. In 2009, RSTP leased the building to the now-defunct San Jose Redevelopment Agency, which established the Entrepreneur Center there, leasing it to nonprofits and business development groups. That lease expired a few years ago, and the owners had to decide…
Larry Ellison Buys Swanky Palo Alto Hotel for Steep Price
Silicon Valley Business Journal 09/14/15 Larry Ellison Buys Swanky Palo Alto Hotel for Steep Price By Nathan Donato-Weinstein http://www.bizjournals.com/sanjose/news/2015/09/14/exclusive-larry-ellison-buys-swanky-palo-alto.html First Lanai. Then Malibu. Now: Palo Alto? Billionaire Larry Ellison’s investment arm has acquired Palo Alto’s Epiphany Hotel — an 86-room trophy property in the heart of downtown Palo Alto — according to public records and local hospitality sources. The Oracle Corp. co-founder, through a limited liability company, just dropped $71.6 million — or about $832,500 per room — for the property that opened last year, according to public records I examined today at the Santa Clara County Clerk-Recorder’s Office. That’s a whopping number and could be a record in the region outside of San Francisco. It’s the latest example of the tech titan’s well-documented penchant for property. In 2012, Ellison paid an estimated $500 million for most of the Hawaiian island of Lanai. He has spent hundreds of millions of dollars buying up multiple properties — including a hotel — in Malibu, the L.A. Times reported in 2013. And of course, there are his luxurious homes in San Francisco, Woodside and Lake Tahoe. “There’s no question he loves trophy properties in great locations,” said Alan X. Reay of Atlas Hospitality…
Larry Ellison Group Buys Hotel in Downtown Palo Alto
San Jose Mercury News 09/15/15 Larry Ellison Group Buys Hotel in Downtown Palo Alto By George Avalos http://www.mercurynews.com/business/ci_28811148/larry-ellison-group-buys-hotel-downtown-palo-alto A group controlled by software tycoon Larry Ellison has paid the equivalent of nearly $1 million per room for a boutique hotel in downtown Palo Alto. PA Hotel Holdings paid $71.6 million for the 86-room Epiphany Hotel, according to Santa Clara County public records. That purchase was for the hotel structure and a ground lease, a transaction that experts say underscores the white-hot job market in Silicon Valley. The deal was first reported in the Silicon Valley Business Journal. Combing the price paid for the building with the value of the ground lease for the property, the hotel was bought by Ellison’s group for a record-setting $1 million per room, estimated Alan Reay, president of Atlas Hospitality Group, which tracks the hotel market. “There is seemingly no end in sight in terms of how high the values are being pushed for quality real estate in Silicon Valley, especially in locations that are hard to duplicate,” Reay said. But the purchase by Ellison’s group of the hotel also points to the strength of the underlying economy in Santa Clara County and the Bay…
Ritz-Carlton, Montage Will Get New Owner as Blackstone Group Agrees to Pay $6 Billion for Strategic Hotels & Resorts
The Orange County Register 09/08/15 Ritz-Carlton, Montage Will Get New Owner as Blackstone Group Agrees to Pay $6 Billion for Strategic Hotels & Resorts By Jonathan Lanser http://www.ocregister.com/articles/hotels-681579-year-hotel.html The hotel buying binge continues. Two of Orange County’s landmark luxury hotels, the 393-room Ritz-Carlton Laguna Niguel and the 250-room Montage Laguna Beach, will get a new owner: a real estate giant that owns, among other things, the Motel 6 budget chain. Blackstone Group is buying Strategic Hotels & Resorts Inc., which owns the Montage and Ritz-Carlton, in a cash and debt deal worth roughly $6 billion. Chicago-based Strategic owns 18 luxury hotels, including San Diego’s Hotel del Coronado and the Essex House overlooking Manhattan’s Central Park. The deal is expected to close early next year. Hotels in the region have been changing hands at a blazing pace. A record $4.4 billion was spent to buy 174 California hotels in the first half of the year, according to Irvine-based Atlas Hospitality Group, a hotel consulting firm. This year’s sales spree included Strategic’s January acquisition of the Montage for $360 million, or $1.4 million per room – the highest valuation ever for a California hotel. Buyers have focused on the high end. Total…
Hotel del Coronado Part of Blackstone Acquisition
San Diego Source 09/08/15 Hotel del Coronado Part of Blackstone Acquisition By Thor Kamban Biberman http://www.sddt.com/News/article.cfm?SourceCode=20150908czb&_t=Hotel+del+Coronado+part+of+Blackstone+acquisition The Blackstone Group which until last year had owned a majority stake in the Hotel del Coronado, will acquire the resort along with the rest of Strategic Hotels & Resorts’ assets for about $6 billion. A New York-based Blackstone (NYSE: BX) entity known as Blackstone Real Estate Partners VIII LP is by early next year set to acquire all outstanding shares of common stock of Chicago-based Strategic Hotels & Resorts Inc. (NYSE: BEE) for $14.25 per share in cash, and all of the outstanding membership units of the company’s subsidiary, Strategic Hotels Funding LLC, not held by the company, for $14.25 per unit in cash. Last year that Strategic acquired the remaining 63.6 percent stake in the 757-room Hotel del Coronado for $210 million in cash, plus the assumption of $475 million in mortgage debt. Blackstone bailed out the hotel by buying that 63.6 percent stake just before Strategic was expected to default on a $600 million loan in 2011. The exact terms as they pertain to the Hotel del alone weren’t clear; Atlas Hospitality Group pegged the hotel’s value at about $800 million…
How Meetings and Events Helped Revive San Diego’s Economy
International Meetings Review 09/02/15 How Meetings and Events Helped Revive San Diego’s Economy http://www.internationalmeetingsreview.com/california/how-meetings-and-events-helped-revive-san-diegos-economy-101990 The downtown San Diego hotel market lives on group business and leisure demand. The city’s bayfront convention center annually hosts nearly 50 shows and conferences, drawing more than 500,000 attendees. And the temperate southern California climate is a magnet for sun-seeking tourists. Like the rest of the United States, the San Diego market suffered during the last recession. Recovery was slower than for other major hotel markets, said Aaron Solaimani, an associate in the San Francisco office of HVS. “The reason is because San Diego doesn’t have an incredibly strong base of commercial roomnights,” he said. “It does draw business from the government segment, which is a type of commercial demand but generally lower-rated because of government per-diems.” Following the slow climb back from the downturn, the market has performed well in recent years with strong increases in performance metrics forecast through 2020. According to a Tourism Economics study, citywide occupancy was 74.6 percent in 2014 and is forecast to rise to 77.7 percent this year and above 78 percent in 2016 and 2017. Average daily rates will increase 6.1 percent this year and are expected…
Hotel Sales Volume in SoCal Shows 61 Percent Mid-Year Gain
The Press-Enterprise 09/08/15 Hotel Sales Volume in SoCal Shows 61 Percent Mid-Year Gain Hotel sales percolate in the Inland area; a Mexican bank wants to gain an Inland foothold By Debra Gruszecki http://www.pe.com/articles/hotel-779336-sales-million.html Hospitality investment is staging a comeback, if hotel sales over the first six months of 2015 are an indication. Atlas Hospitality Group’s mid-year Hotel Sales Survey reports a record $4.4 billion in sales across the California, and $2.3 billion in sales came from 67 hotel transactions in Southern California. Hotel sales volume eclipsed all previous mid-year totals since the Irvine-based hospitality industry reporting service started tracking sales in 1994, Atlas president Alan Reay said in the report. Across Southern California, the $2.3 billion in total hotel sales was up 61 percent from $1.4 billion in transactions over the January-to-June period of 2014. Twenty hotels sold in the Inland region for $130.4 million over the first six months, the survey said. Over the same period of 2014, 23 hotel sales took place in Riverside and San Bernardino counties and transactions totaled $89.1 million. The largest and most expensive Riverside County hotel sale was Renaissance Palm Springs, a 410-room property selling for $65 million. The largest hotel to be…
Changes Ahead at Capitola Hotel
Santa Cruz Sentinel 09/06/15 Changes Ahead at Capitola Hotel By Jondi Gumz http://www.santacruzsentinel.com/business/20150906/changes-ahead-at-capitola-hotel A new owner is bringing Southern hospitality to the Capitola Hotel and contemplating how to update the 10-room lodging tucked into the beachfront village at 210 Esplanade. “I get asked all the time, ‘Do you know where it is?’” said Corrie Sid, 45, a graduate of Auburn University in Alabama and a mother of two, who took over at the end of July. The hotel was built in 1946. Sid’s goal is to “make the hotel what we think it should be.” She’s already begun talks with designers about the pineapple logo and with architects at Fuse down the street about potential room reconfigurations, trying to align everything for the hotel’s success. “She has so much energy,” said Wendy Melrose of Lina’s Floral, impressed she is “a woman in business trying to do it all,” wearing a matching ensemble and full makeup and sharing her ideas to upscale the property. “She introduced herself to all her neighbors,” Melrose said. “A lot of times, people don’t do that any more.” Sid put her psychology major to work in the corporate world in the San Francisco Bay Area, training…
California Hotel Property Sales at Record High Values
The Registry 09/03/15 California Hotel Property Sales at Record High Values By Robert Carlsen http://news.theregistrysf.com/california-hotel-property-sales-at-record-high-values/ California hotel sales reached a record dollar volume of more than $4.4 billion in the first six months of 2015, a 64 percent increase over the same period in 2014, according to Atlas Hospitality Group’s recently completed 2015 Mid-Year California Hotel Sales Survey. This total dollar amount for a six-month period was greater than any annual total in the history of state hotel sales, except for 2006, Atlas added. Other statewide figures show unprecedented activity and results, including the median sales price per room increasing 25 percent and 13 deals that traded in $100 million-plus range versus four for the same period in 2014. Despite all the increases, the number of individual hotel sales actually declined 7 percent. The Irvine-based brokerage and research firm said that Northern California increased 83 percent in total dollar volume and Southern California was up 51 percent. In the first half of 2015, San Francisco City and County saw a 58 percent decrease in sales transactions, but a 120 percent increase in total dollar volume. “Even though we are seeing fewer sales, we are seeing more expensive transactions and bigger…
Four-Diamond JW Marriott Proposed for Disneyland Area
The Orange County Register 08/29/15 Four-Diamond JW Marriott Proposed for Disneyland Area By Art Marroquin http://www.ocregister.com/articles/anaheim-680062-hotel-city.html ANAHEIM – A developer has submitted plans to build a luxury hotel at the GardenWalk mall near Disneyland, becoming the first to take advantage of a hefty city subsidy that aims to entice more-affluent tourists to stay in Anaheim. The JW Marriott Anaheim would rise 12 stories with 466 guest rooms, ballrooms and meeting rooms on a 2.8-acre dirt lot near Katella Avenue and Clementine Street, within walking distance of Disney’s theme parks and the Convention Center. It would cost $150 million-plus to build the hotel, financed in large part by a 70 percent return on bed taxes collected there over 20 years. Opponents have challenged the deal in court. Despite the ongoing legal battle, developer Bill O’Connell Sr. said that “the time was right to move ahead,” and an application was filed Wednesday with Anaheim’s Planning Department. “With the JW Marriott, we are bringing a highly respected hotel brand that will do great things by creating jobs, boosting the hotel industry and attracting bigger and better conventions to Anaheim,” said O’Connell, head of O’Connell Hotels & Hospitality. He is developing the hotel with…
Unique Issues Impact Hotel Performance
GlobeSt.com 08/24/15 Unique Issues Impact Hotel Performance By Carrie Rossenfeld http://www.globest.com/news/12_1181/orangecounty/hotel/Unique-Issues-Impact-Hotel-Performance-361016-1.html IRVINE, CA—Hotel owners have to deal with a myriad of issues that most commercial real estate investors don’t face, such as union labor, minimum-wage issues, ADA regulations and a host of others, Atlas Hospitality Group president Alan Reay tells GlobeSt.com. After the release of the firm’s mid-year California hotel-sales survey, we spoke exclusively with Reay about what it takes to be successful in the hotel sector. GlobeSt.com: What qualities do the most successful hotel investors have? Reay: First and foremost, it is management skills or having an association with a skilled hotel-management company. Second, it is knowing your product and market so you have the ability to move quickly when the right hotel becomes available for sale. Last but not least is capital and the ability to move on a purchase with very short contingencies, which can put you ahead of the other buyers trying to acquire. GlobeSt.com: What are the most popular types of hotels for investors today? Reay: This falls in to two main categories: 1. trophy hotels in “A” locations and 2. upper limited-service hotels, 10 years or newer, e.g., Hilton/Marriott brands. Examples are Residence Inn…
