California Hotel Sales Hit Record Price
California Hotel Sales Hit Record Price
Napa Valley Register
08/24/19
California Hotel Sales Hit Record Price: Five Napa County Hotels Sold in First Half of 2019
By Jennifer Huffman
California hotel sales hit a record median price per room through the first six months of 2019, at $130,025, according to a report from Atlas Hospitality Group.
This was a 12.7 percent increase over the same period in 2018, and up 146 percent over the past 10 years, said the report.
Individual hotel sales in the Golden State rose 8 percent in the first half. San Bernardino County led the way, up 83 percent, followed by a 57 percent increase in Los Angeles County.
San Diego County saw the highest total sales dollar volume, at just under $329 million. San Francisco County was next, with $294 million.
Locally, five hotels sold in Napa County in the first six months of the year.
They include the McClelland-Priest Ben & Breakfast Inn at 569 Randolph St. in Napa, The Setting Inn at 1205 Hillview Lane in Napa, Bel Abri at 837 California Blvd. in Napa, the Yount Mansion Inn at 423 Seminary St. in Napa and Dr. Wilkinson’s Hot Springs Resort at 1507 Lincoln Ave. in Calistoga.
The total sales dollar volume of those hotels totaled $31.672 million. The five sold hotels totaled 111 rooms.
For the first six months of 2019, the median price per room for a Napa County hotel sale declined 16.1 percent year-over-year; from $385,455 to $323,333 per room.
However, because of the small number of Napa County hotels that were sold in the first half of both 2018 and 2019, that statistic is misleading, said Alan Reay, president, Atlas Hospitality Group.
Only three hotels were sold in Napa County from January to June 2018: the Best Western Elm House Inn Napa, the Napa Inn on Warren Street and the Beazley House in Napa.
Reay said that in the coming months and years, he expects “continued strong profits” for Napa County hotels “as demand for rooms will still outstrip supply, driving up rates and occupancies.”
“Buyer demand for hotels in Napa is very strong, but few owners are willing to sell as they enjoy record profits,” he said.
The regional report also noted that San Francisco County hotel transactions decreased 13 percent in the first half of 2019. Total dollar volume was down 55 percent.
The county’s average price per room decreased 10 percent, but median price per room was up 35 percent.
At over $117.7 million, the largest and most expensive sale was the 155-room Loews Regency San Francisco.
Alameda County had one hotel sale, down 67 percent. Total dollar volume increased 5 percent.
Average price per room went up 71 percent, and median price per room rose 55 percent.
The 175-room Hyatt Place Emeryville/San Francisco Bay Area sold for $66.25 million.
Sacramento County had one hotel sale in the first half of 2019, a 67 percent decrease. Total dollar volume dropped 79 percent.
Average price per room was down 25 percent, but median price per room was up 28 percent.
The 116-room Comfort Inn & Suites Rancho Cordova-Sacramento sold for $8 million.
The results from 2019 mid-year show that California hotel sales rebounded from where they were halfway through 2018, with the Golden State’s median price per room at an all-time high.
California continues to post some very impressive sales numbers. This has many experts wondering when the market will slow down, said the report.
As long as the economy remains strong and interest rates remain low, prices should continue to go up. However, if demand slows, the supply of new hotel rooms coming online could start to impact price appreciation.
