California hotel sales finish 2022 better than expected

California hotel sales finish 2022 better than expected

March 21, 2023

After a strong first half of 2022, California hotel sales in the second half of the year were predicted to show a large drop because of increased interest rates and economic uncertainties.

But according to a report by Atlas Hospitality Group, a Newport Beach-based commercial real estate firm specializing in the sale of California hotels, that didn’t happen.

“It seems that there is a large pool of buyers who are willing to purchase quality California hotel deals at prices at, or below, the cost of financing, which is something we have rarely seen before,” Atlas stated in its 2022 Year-End California Hotel Sales Survey, released March 7. “The lack of new supply of hotels combined with upward inflationary pressures are some of the main reasons buyers remain extremely bullish on California hotel investments.”

Last year in the North Bay, most of the sales activity took place in Sonoma County, with 16 hotels sold, according to Atlas.

The most expensive transaction in the county was the 226-room Fairmont Sonoma Mission Inn, located at 100 Boyes Blvd., in Sonoma. Brookfield Asset Management bought the property for $267.1 million, according to Atlas. The deal closed Oct. 21.

In Healdsburg, the River Belle Inn, a seven-room bed and breakfast located at 68 Front St., sold for $7.25 million in a deal that closed Sept. 27, according to Atlas.

“The River Belle is such a lovely property, and I’m excited to add this unique property to our growing portfolio and provide new management and development opportunities for our growing team at Vertice Hospitality,” Tony Greenberg, CEO of Vertice Hospitality, said in a statement first published in The Press Democrat on Oct. 14.

The next highest number of hotel deals in the North Bay last year were in Mendocino County, with the two largest sales in Little River. The 31-room Glendeven Inn, located at 8205 North Highway 1, sold for $7.7 million. And the neighboring 31-room Inn at Cobbler’s Walk, at 8200 North Highway 1, sold for $7.6 million, according to Atlas. Both deals closed in early June.

Seven hotels sold last year in Napa County, including the 17-room White House Inn for $10.1 million. That deal closed on Nov. 30, according to Atlas. Investment firm Cambridge Lansdowne bought the property, which is being managed by Aimbridge Hospitality’s Evolution Lifestyle, as the Business Journal previously reported. The inn is located at 443 Brown St. in Napa.

There were five hotel sales last year in Solano County, three in Marin County and two in Lake County, according to Atlas.

Statewide, Atlas reported the biggest sale in 2022 was for the 260-room Montage Laguna Beach, at $641 million. It also noted a new record for the median sale price per room, at $151,636. That’s up 10% over the previous record set in 2021.

Meanwhile, there are a handful of lodging properties on the market in the North Bay, according to LoopNet, an online commercial real estate marketplace:

Napa County

Washington Street Lodging, 1605 Washington St., Calistoga. The six-room hotel is listed for $2.25 million.

Embrace Calistoga, 1139 Lincoln Ave., Calistoga. The three-room hotel is on the market for $4.5 million.

The Bungalows at Calistoga, 207 Wappo Ave. The three-room bed and breakfast is listed for $3.15 million.

Two bed-and-breakfast properties under one owner, located adjacent to each other: 1386 and 1406 Calistoga Ave. The listing doesn’t include an asking price.

Solano County

Carquinez Inn, 160 Lincoln Road East, Vallejo. 60-room hotel selling for $6.5 million.

Rio Grove Motel, 640 State Highway 12, Rio Vista. The 15-room hotel is listed for $2.7 million.

Mendocino County

Super 8, 888 S. Main St. Fort Bragg. The 53-room property is listed for $7.5 million.

Sonoma County

A 4,422-square-foot glamping site, located at 16590 Highway 116 in Guerneville. Listing price is $6.2 million.

There were no listings in Marin or Lake counties.

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