Atlas in the news

August 16, 2023 Bianca Barragán, Southern California  Hotel sales in Los Angeles County declined nearly 53% in the first half of 2023 compared to the same time last year, according to a report this week from Atlas Hospitality Group.  Only 17 hotels in LA County traded hands in the first half of this year, down from 36 sales last year. The county’s largest transaction was the $760M foreclosure sale of the Fairmont Century Plaza Hotel, although the full price tag included the hotel, retail space and some of the condos in the Century City property.  Interest rates are hammering transaction volumes, and buyers and sellers are far apart on offers, Atlas Hospitality Group President Alan Reay said. Even when both parties can agree on a price, often those properties aren’t getting appraised and financed.  Only one hotel transaction over $5M closed in the city of Los Angeles in the second quarter, which was also the first quarter the city’s new tax on transactions over $5M was in effect. Normally, there would be anywhere from 15 to 20 in the second quarter of the year, Reay said.  “We have, on the national scale, what’s happened with interest rates,” Reay said. “You can then apply what the city of Los Angeles has done as of April 1,…

By Roy Wright  AUG 16, 2023 Sales activity in the hotel markets of the Bay Area and California has experienced a sharp decline in the first half of 2023, signaling the devastating impact of the coronavirus outbreak on the sector. The number of hotels sold during this period has dropped significantly, reminiscent of the recession in 2008 and 2009. According to Atlas Hospitality Group, a firm that tracks the hotel industry in California, the number of hotels sold in the state decreased by 52.9% in the first half of 2023 compared to the same period in 2022. This decline is even worse than the 51% drop experienced during the last recession in 2009. Both Northern and Southern California have been severely affected by the decline in hotel sales. In Northern California, there was a 44.6% decrease in individual hotel sales, with only 62 hotels sold in the first half of 2023 compared to 112 in the previous year. Southern California, on the other hand, experienced a 58.9% nosedive in hotel sales, with only 62 hotels sold compared to 151 in the same period last year. Amidst this downturn, notable hotel deals have still taken place. In Alameda County, the 276-room…

Disconnect Over Prices Keeps Buyers, Sellers at Odds The Fairmont Century Plaza in Los Angeles sold for $760 million in a foreclosure sale during the first half of 2023. (Accor) By Bryan Wroten / Hotel News Now August 16, 2023 | 6:07 AM The number of individual hotel sales in California during the first half of 2023 dropped by nearly 53% year over year. According to Atlas Hospitality Group’s California Hotel Sales Survey 2023 Mid-Year, the number of sales dropped from 263 in 2022 to 124 this year. The average sales price grew 33.6% year over year, but the median price fell by 9.4% to $6.88 million. However, the average price per key increased by 14.3% to $220,276, while the median price grew 12.1% to $160,851. The number of transactions over $5 million dropped from 175 in the first half of 2022 to 79. The overall drop in transaction volume eclipses a decline in 2009 during the Great Recession, Atlas Hospitality President Alan Reay said. “That’s the steepest decline we’ve ever seen in our any of our surveys,” he said. The sales volume in California during the pandemic was a bit of an anomaly, he said. The number of deals was so…

By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group PUBLISHED: August 15, 2023 at 12:00 p.m. | UPDATED: August 16, 2023 at 9:22 a.m. OAKLAND — Sales activity for the hotel markets in the Bay Area and California more broadly imploded during the first half of 2023, in a renewed sign of the sector’s collapse following the coronavirus pandemic. The number of hotels sold in the Bay Area and statewide tumbled over the first six months of this year at a pace reminiscent of the nosedive the lodging industry suffered in California in the wake of the recession of 2008 and 2009. “We have seen nothing like this, nothing this bad,” said Alan Reay, president of Irvine-based Atlas Hospitality Group, which tracks the hotel industry in California. Reay would know. Atlas Hospitality has been analyzing the statewide lodging sector for more than 20 years. Specifically, the number of hotels sold in California during the first half of 2023 plunged by 52.9% compared with the first six months of 2022, Atlas Hospitality Group reported. In 2009, at the tail-end of the last recession, hotel sales in California tumbled 51%. Both Northern and Southern California suffered huge declines in the number of hotels sold, Atlas Hospitality reported. Northern…

Blazes Seen Not Only Curbing Tourism in Near Future, but Raising Insurance Costs Over Time By Jack WitthausCoStar News August 10, 2023 | 1:47 P.M. The Hawaii wildfires in Maui that have killed dozens of people and destroyed a wide swath of properties are expected to deal a major blow to the economy on the island after the burning of a major tourism and commercial district. The fires appear to have razed at least two hotels, the Best Western Pioneer Inn and The Plantation Inn, along with dozens of restaurants, shops, homes and more in Lahaina, a popular destination in West Maui, according to a statement by Maui County officials and reports from the area. About 36 people died, the county said late Thursday, with that toll expected to rise. Hawaii Gov. Josh Green told CNN on Thursday that as many as 1,700 buildings were destroyed in the fire and about 80% of Lahaina is destroyed. The governor said only some stone buildings were still standing, and he expects the total dollar damage to reach into the billions. Lahaina’s destruction will have a ripple effect on tourism to Maui, Hawaii’s second-biggest island. Each year, about 2.1 million people visit Front Street,…

CHERYL SARFATY THE NORTH BAY BUSINESS JOURNAL August 8, 2023, 3:31PM A real estate firm that tracks the state’s hotel industry has released its midyear hotel development report, which shows a sector that largely remains stalled in the face of an uncertain economy. Among the findings, over the past two years as of June, California has seen a decline of more than 60% in the number of new hotel openings, according to Atlas Hospitality Group’s California Hotel Development Survey 2023 Mid-Year. The firm also releases a year-end survey. The midyear report isn’t surprising to Alan X. Reay, president of Atlas Hospitality, a Newport Beach-based real estate brokerage firm that specializes in hotel properties. Reay said he also expects new hotel projects in the planning stages to remain mostly on ice for another 18 months to two years. “You have lenders now that are pulling back from making loans altogether,” said Reay. “It is extremely difficult to get a lender to look at a construction project because of the unknowns.” Inflationary pressures, supply-chain challenges and ongoing labor shortages that arose from the pandemic continue to obstruct progress in hotel projects, Reay said. Hotel construction loans are typically for two years, he…

AUGUST 7, 2023 By: Katie Murar No new hotels opened in Orange County during the first half of the year, as the state continues to experience a post-pandemic drop in hospitality deliveries. Just one hotel has opened in the county since the start of 2022, the 124-room Element Irvine, according to data from Irvine-based Atlas Hospitality Group. On a statewide basis, the number of hotels opened in California has dropped more than 60% over the past two years. The downward trend of hotel openings is expected to continue—and potentially worsen—over the next two years as a result of higher interest rates and construction costs, according to Atlas Hospitality Group President Alan Reay. “We are definitely going to see a greater decline in hotel openings in the state over the next 18 to 24 months, with most lenders shying away from hotel financing today,” Reay told the Business Journal. “If you’re not already out of the ground, it is going to be difficult to get started.” Supply and Demand Though the market dynamics for building a new hotel are less than ideal amidst financing concerns, demand for hotels in Orange County are on the rise, with tourism figures surpassing pre-pandemic levels…

JEFF QUACKENBUSH Two Wine Country hotels with a combined 222 rooms are at risk of being sold in foreclosure early next month to cover at least $80.7 million outstanding on the financing. Trustee’s sales are set for the 90-room Cambria Napa Valley hotel at 320 Soscol Ave. in Napa and 132-room Cambria Sonoma Wine Country hotel at 5870 Labath Ave. in Rohnert Park, according to notices filed in Napa and Sonoma counties on July 13. If respective owners Pacific Hotel Napa LLC and Pacific Hotel Sonoma LLC, managed by Southern California-based Stratus Development Partners, don’t make good with the lender, they could lose the Napa hotel to auction on Aug. 4 and the one in Rohnert Park on Aug. 11. Some of the reasons reportedly given for why these hotels ran into financial trouble are unique to the North Bay and California. Yet the purported financing challenges also parallel what some commercial real estate experts are saying is a looming wave of foreclosures nationwide on hotels and office buildings beset with low occupancy during and since the pandemic. Availability and pricing of financing have been big problems for hotel owners nationwide and are key reasons behind high-profile foreclosures recently, according to Alan Reay, president…

Biggest hospitality deal in San Diego area this year JUL 29, 2023, 1:00 PM By TRD Staff In what stands as the region’s largest — and California’s third-largest overall — hospitality deal this year, Chicago-based investment firm GEM Realty Capital bought The Inn at Rancho Santa Fe, a luxurious resort in an affluent enclave near San Diego, for $100 million, CoStar reported. The seller was Steve Hermann Hotels of Montecito, California.  According to CoStar data, Hermann purchased the 80–room property — built in 1922 in the unincorporated village of Rancho Santa — in May 2022 for about $42.7 million and subsequently embarked on a comprehensive renovation that is currently underway. The renovations are expected to be finished late this year. Elliot Eichner, principal at Sonnenblick-Eichner, the brokerage representing the seller, said that the buyer recognized the opportunity to acquire a five-star luxury resort in a market with significant barriers to entry.  The acquisition comes amid a resurgence in travel as the Covid pandemic recedes. David Sonnenblick, also a principal at Sonnenblick-Eichner, said that despite an environment of high interest rates and recessionary concerns, substantial capital remains available from both institutional and private investment funds for “quality transactions.” The acquisition of the Inn at Rancho…

So far this year, just one new hotel in the county has opened — in downtown San Diego BY LORI WEISBERG AUG. 4, 2023 5:40 AM PT The pace of hotel openings across San Diego continued to be sluggish during the first half of this year, with just one hotel — in downtown San Diego — making its debut in 2023. It’s a trend being repeated across the state, according to Atlas Hospitality Group’s just released, mid-year hotel development survey. California has now seen a decline of more than 60 percent over the last two years in the number of hotels and rooms opened during the first six months of the year, the Orange County-based brokerage reported. Similarly, San Diego has experienced a marked two-year decline — 75 percent over the last two years, Atlas Hospitality reported. While construction activity has picked up year over year, don’t expect that trend to last well into the future, given the rising cost of financing and increases in interest rates, predicts Atlas President Alan Reay. “Those hotels that are opening now were planned at a time when interest rates were a lot lower and people were more bullish on the real state market,” Reay said….

20 hotels opened during the first half, 46% fewer than the average pace of 2018-21 AUG 2, 2023, 5:26 PM By TRD Staff Hotel California has become Hotel Terminus, with a steep decline in new hospitality suites across the state.  In the first six months of the year, 20 new hotels opened across the Golden State, down 31 percent in a year and 46 percent compared to the average pace of 2018-2021, the San Gabriel Valley Tribune reported, citing figures from consultancy Atlas Hospitality Group. In Northern California, prospects were worse than the state aveage, with 10 hotels opened — down 52 percent in a year and down 46 percent compared to 2018-2021. In Southern California, hotel prospects were slightly better, with 10 hotels opened from January through June — up 25 percent in a year but down 46 percent compared to 2018-2021. The outlook was just as sluggish when measured by the number of new rooms available in the first six months of the year. Across the state, 2,705 new rooms were available, down 24 percent in a year and down 42 percent compared to 2018-2021.  Southern California’s 1,210 rooms were up 65 percent in a year but down 51 percent…

Roland Li Aug. 2, 2023 Updated: Aug. 2, 2023 9:43 a.m. San Francisco’s only new hotel of 2023 is opening in September in the heart of the Financial District, in a major bet on the continued recovery of tourism and business travel. Owner KHP Capital Partners is rebranding the former Le Méridien hotel at 333 Battery St. as the Jay after a major renovation. The firm bought the hotel for $221 million in 2021 from Park Hotels & Resorts — the hospitality company that is also giving up two of the city’s biggest hotels after ceasing mortgage payments. While other real estate investors are fleeing the city, KHP is finishing up renovations on a new lobby, fitness center, meeting rooms and all 360 guest rooms. Two new restaurants operated by Omakase Restaurant Group are opening in the hotel: Third Floor in the fall and Sage at the beginning of next year. AvroKo is the interior designer. “We are strong believers in the ultimate recovery of San Francisco, and we love this Embarcadero location for both business and leisure travelers. That’s why we’re making a major investment to transform the property into the City’s leading lifestyle hotel, designed to uniquely reflect San Francisco and be a hub of…