Atlas in the news
Millennium Hotel, a Flashy Full-Service Brand, Sets Sights on Sunnyvale — Again
Silicon Valley Business Journal 08/10/15 Millennium Hotel, a Flashy Full-Service Brand, Sets Sights on Sunnyvale — Again By Nathan Donato-Weinstein http://www.bizjournals.com/sanjose/news/2015/08/10/millennium-hotel-a-flashy-full-service-brand-sets.html Nearly 10 years ago, Sunnyvale’s sprawling Four Points Sheraton came tumbling down, with Silicon Valley poised to get a feather in its cap for a replacement: Northern California’s first Millennium Hotel, a swanky full-service brand with properties in Europe, Asia, the Middle East and a handful of U.S. “gateway cities.” The economy had other plans. Now, Millennium is resurrecting the project at 1250 Lakeside Drive, which will include 263 guest rooms and 250 apartment units next door. It’s the latest entrant in the region’s positively bursting hospitality development pipeline, with some 2,211 rooms at some stage of development or construction in the South Bay, according to PKF Consulting. But most of the planned projects are “select-service” hotels — properties that do not include significant restaurant or meeting space. The Millennium revival is notable because it suggests the market may finally be ripe for full-service hotels that offer more amenities and charge higher nightly rates. That would be great news for cities, which stand to gain more in lucrative hotel taxes as rates climb, as well as businesses seeking…
OC Hotel Market Stays Hot with $126.2M Deal
Orange County Business Journal 07/20/15 http://www.ocbj.com/news/2015/jul/20/oc-hotel-market-stays-hot-1262m-deal The 485-room Irvine Marriott Hotel at the Irvine Towers office complex near John Wayne Airport has been sold to a Los Angeles-based institutional investor. An investment affiliate of L.A.-based brokerage CBRE Group Inc. recently closed on the purchase of the 16-story hotel, which runs along the San Diego (405) Freeway at 18000 Von Karman Ave. Terms of the deal were not disclosed by the buyer, although property records indicate a fund overseen by CBRE Global Investors paid about $126.2 million, or $260,000 a room, for the establishment. The deal is the second priciest hotel sale reported in Orange County this year, trailing only January’s $360 million sale of the Montage Laguna Beach, which broke state records by selling for a little more than $1.4 million per room. The per-room price paid for the Marriott is well behind that benchmark. But it still is about $100,000 per room more than the average sale price for California hotels valued at more than $5 million that were sold in 2014, according to data from Irvine-based hospitality consultant Atlas Hospitality Group. CBRE Global Investors said this month that it had closed a new fund—called CBRE Strategic Partners…
Hotel Los Gatos Bankruptcy: Deal in Works to Sell Hotel for Princely Sum as Debtors Resist “Fire Sale” Auction
07/17/15 Silicon Valley Business Journal By Nathan Donato-Weinstein http://www.bizjournals.com/sanjose/news/2015/07/17/hotel-los-gatos-bankruptcy-deal-in-works-to-sell.html Delays and false starts may have been a good thing in the on-again, off-again sale of Hotel Los Gatos. More than four years after the upscale 72-room hotel filed for bankruptcy, a buyer finally appears to be in sight — and at a higher price than previous deals that were ultimately scuttled. The question now: Whether the property’s biggest lender will get on board with the deal, or push for what the debtor is calling “a fire sale.” IHA Hotel Group, which also owns San Francisco’s King George Hotel, is in contract to buy the 72-room property for $29.5 million, according to court records filed this week. It would mark the third time the hotel has reached a purchase-and-sale agreement with IHA, but attorneys for the hotel said that environmental hurdles that killed previous sales are nearly cleared. “The sale proceeds will be sufficient to pay all of the Debtor’s creditors in full, with interest,” attorneys for the Los Gatos Hotel Corp., wrote in a status conference statement on July 15, a day after going into contract with IHA. The sale price of roughly $410,000 per room underscores the region’s red-hot…
Demand Intensifying for Silicon Valley Hotels
Real Estate Alert 07/01/15 Hotel owners in the Silicon Valley area have responded to strong investor demand by offering nearly a half-dozen properties in recent weeks. Investors have shown that they’re eager to snap up properties in Silicon Valley and the greater San Francisco Bay Area, where hotels have posted substantial gains in revenue and occupancy thanks largely to the booming technology sector. And with only a few hotels in San Francisco itself hitting the selling block, buyers have been forced to look south. Along the peninsula, investors are finding fresh listings for large hotels in markets such as San Jose, Sunnyvale and Palo Alto. The properties, which have a combined valuation of some $600 million, run the gamut from newly renovated luxury hotels to older properties with redevelopment potential. In every instance, brokers project that room rates will continue rising for at least two years. In the first four months of the year, hotels in the San Jose market — which Cruz saw revenue per room rise a whopping 24% from a year earlier, according to STR, which tracks supply and demand data for the hotel industry. That’s on top of a 15.6% increase in 2014 versus the year…
Record Room Prices Tempt Developers into Hotel Construction
Silicon Valley Business Journal 03/27/15 Record Room Prices Tempt Developers into Hotel Construction By Nathan Donato-Weinstein http://www.bizjournals.com/sanjose/print-edition/2015/03/27/record-room-prices-tempt-developers-into-hotel.html Working late into the night during a Mountain View City Council meeting last June, hotel consultant Maurice Robinson missed his flight back to Los Angeles. No worries, he figured. There’s always a place to stay. But as he quickly figured out: If it’s a weekday in Silicon Valley, the answer is — maybe not. “I got on the phone and was calling every hotel in town,” Robinson said. “All the usual suspects were full.” He ended up paying $300 for a third-tier property on El Camino Real. “They probably average about $150 a night,” Robinson said. “But this is the guy’s last room. And I’m probably the first guy to ever pay that.” Ask anyone who has traveled to the Bay Area lately for business, and you’ll likely hear horror stories like Robinson’s. Booming employment — 113,500 jobs were added in 2014 — has brought a surge in weekday business travel. Combine it with little new supply in the last five years, and hotel occupancy in Santa Clara County climbed 32 percent between 2009 and 2014, according to industry tracker STR. Average daily…
Del Mar Area Hotel Is Sold
The San Diego Union-Tribune 07/02/15 By Lori Weisberg http://www.sandiegouniontribune.com/news/2015/jul/02/doubletree-hotel-carmel-valley-sold-san-diego-firm/ The 224-room DoubleTree San Diego Del Mar hotel has been sold to a San Diego firm for $40 million, marking the fourth San Diego lodging property to sell in the last couple of months. The buyer, Southwest Value Partners, a private real estate investment firm that focuses on commercial, hospitality and residential properties, declined to comment on its purchase. Among its holdings are the Westin Hilton Head Island Resort & Spa in South Carolina, the InterContinental New Orleans and the Westin San Diego on West Broadway downtown. Brokering the sale on behalf of the seller, PHF Ruby LLC (an affiliate of Fillmore Capital), was CBRE Hotels. The 5-story property on El Camino Real in Carmel Valley originally opened in 1991 and underwent a partial renovation in 2012. While CBRE would not reveal the sales price of the hotel, it was listed as $40 million by Real Capital Analytics, a research company that tracks hotel sales throughout the country. Based on the per-room sales price, it appears Southwest made a good deal, said hotel analyst Alan Reay. “At a per room price of $180,995 it is at the lower end…
Does the Argument Behind Anaheim’s Luxury Hotel Subsidy Plan Hold Water?
Voice of OC 06/30/15 By Adam Elmahrek http://voiceofoc.org/2015/06/does-the-argument-behind-anaheims-luxury-hotel-tax-subsidy-plan-hold-water/ Earlier this month, in the latest iteration of hotel subsidies in Anaheim, the City Council majority approved a policy that calls for the city to kick back 70 percent of room-tax revenue to developers of luxury hotels based on the premise that high-end hotels generate more tax revenue than those in lower tiers. But not everyone buys this argument, including Anaheim Mayor Tom Tait, the owner of a large hotel chain, and a hotel-financing expert. Tait was the first to dispute the reasoning, saying it comes down to simple arithmetic. When the Council approved the policy at its June 16th meeting, the mayor pointed out that while the city currently receives, on average, $15.33 in revenue per room night from a three-diamond hotel; under the subsidy policy, the city would only get $4.25 per room night from a four-diamond hotel. “Why would we do this?” Tait said. City staff — and a city-hired consultant — say Tait’s basic math problem fails to take into account a more complex reality. Their reasoning goes like this: A four-diamond hotel is constructed with steel frames and can therefore hold many more rooms than a…
Anaheim Attempts to Lure Upscale Hotels with Big Tax Breaks
06/10/15 The Orange County Register By Art Marroquin ANAHEIM – Anaheim is trying to get into the luxury hotel game, even without an ocean. The City Council on Tuesday will consider whether to offer hefty room-tax breaks to developers wanting to build upscale resorts, a move that supporters say will attract more lucrative conventions and high-spending tourists. If the plan is approved, Anaheim soon could have hotels trying to compete with oceanfront resorts in Newport Beach, Laguna Beach, Dana Point and Huntington Beach for the highest end of the hospitality business. Anaheim would be among the few cities in Orange County subsidizing high-end hoteliers. “We believe that we’re missing a very important segment of the hospitality industry,” said John Woodhead, Anaheim’s community development director. Guests at Anaheim hotels pay a tax of at least 15 percent of their room rate. Under Anaheim’s proposed initiative, developers of hotels that meet AAA’s stringent guidelines for four-diamond ratings would get to keep 70 percent of their bed taxes for up to 20 years. Of the remainder, 10 percent of the taxes would go to the city and 20 percent would pay off bonds that funded improvements to Anaheim’s city resort district in…
Beach-Style Makeover for Island Hotel in Newport Beach
05/29/15 The Orange County Register By Hannah Madans The hotel was built in 1986 by the Irvine Co. and managed by Four Seasons until Irvine Co., which owns it, took over the management 10 years ago. “We continue to do renovations because we are always reinvesting in our properties and seek to be the best and make sure we are relevant to what our customers needs are,” said Ralph Grippo, president of Irvine Co.’s resort division. Grippo said the hotel now has occupancy rates of more than 80 percent and has had positive customer feedback since the renovations. Island Hotel is not the only Irvine Co. resort property to get a facelift. Late last year, Hotel Irvine underwent a complete overhaul to become a trendy lifestyle hotel. The renovations mark a trend in the hospitality industry, which is concentrating on renovating aging properties rather than building new ones. In 2014, 30 hotels were purchased in Orange County, more than double the 14 transactions registered the year before, according to Atlas Hospitality Group, an Irvine-based real estate firm that specializes in hotels. Another hotel undergoing significant change is the Anaheim Majestic Garden Hotel, which shed its parent, Sheraton, last week…
Oakland Marriott Bought by DiNapoli Group for Estimated $84 Million
OAKLAND — The iconic Marriott Hotel, a high-rise landmark in downtown Oakland, has been bought by a joint venture led by veteran realty firm DiNapoli Capital Partners. The hotel was bought for about $84 million, according to sources familiar with the transaction. “This shows that downtown Oakland is a very strong market,” said Alan Reay, president of Atlas Hospitality Group, which tracks the hotel market in California. “Prices for hotels are being pushed up in San Francisco, and that has pushed up interest in buying hotels in all the other markets, such as the East Bay and the South Bay.” CIM Group, through an affiliate, sold the 21-story hotel, which has 489 rooms, CIM said Monday. The buyer was a joint venture of DiNapoli Capital and Apollo Global Management, a private equity investment firm. In 2007 CIM bought the Oakland City Center Marriott, along with the 162-room Courtyard Oakland Downtown. At that time, CIM paid $66 million for the two hotels together. The realty firm undertook a wide-ranging renovation of the Oakland Marriott that was completed in 2011. CIM later teamed up with the city of Oakland for a renovation of the 89,000 square feet of meeting spaces in the…
Disney Purchases Carousel Inn for $32 Million
ANAHEIM – The Walt Disney Co. has purchased a hotel that sits directly across Harbor Boulevard from its two theme parks for $32 million, according to public records. Disney, through a limited-liability corporation, Carousel Holdings EAT, purchased the 131-room Carousel Inn & Suites on 1530 S. Harbor Blvd. from Good Hope International. Messages to Good Hope representatives for comment were not returned on Wednesday. A Carousel Inn manager said he was unaware of the sale. A Disneyland spokeswoman confirmed the purchase. Sandwiched between the Pizza Press restaurant and the Tropicana Inn & Suites, the five-story hotel features a rooftop pool and guest rooms ranging in size from 300 to 700 square feet. Guests typically pay $109 to $400 per night. Disney finalized the purchase on March 23, according to public records. “The Walt Disney Co. saw this as a strategic investment, as opportunities to purchase properties in close proximity to the resort are extremely rare,” said Suzi Brown, a Disneyland spokeswoman. Brown said the current management will continue to operate the Carousel Inn. She added that Disney has no long-term plans for the property at this time. “I think whatever they have in mind will be good for the resort…
Yay, downtown Sacramento gets a Kimpton Hotel. What’s a Kimpton?
It’s big news in the hotel industry that downtown Sacramento is getting a boutique property with the Kimpton Hotels brand. But outside of the hotel industry, few folks know the name. There are no hotels called Kimpton. The San Francisco-based chain operates its boutique hotels under mostly unique local names. In San Francisco, those include Hotel Palomar, the Argonaut Hotel, Hotel Tomo and The Tuscan. Another high-profile Kimpton property is the Sir Francis Drake on Union Square, which features doormen in traditional British Beefeater garb. The company has not decided what to call the Sacramento hotel, said Aimee Grove, a spokeswoman for Kimpton Hotels. She said it will likely be a “unique brand to the Sacramento area. However in terms of the name specifically, there is nothing confirmed.” The announcement of the brand came Monday. The Sacramento Kings and JMA VenturesLLC are developing a 250-room hotel in part of a 16-story mixed building near the new downtown arena. The project also includes condos and retail space. “Kimpton is a hip, lifestyle hotel. It is attracting the millennials,” said Alan Reay, president ofAtlas Hospitality Group. “It is a good choice for the next 15 to 20 years.” The Kimpton choice signals…
