Atlas in the news

New Rules Passed For LA Hotels As Industry Worries About Development Pause

December 10, 2023 | Bianca Barragán Existing hotels like the Biltmore Hotel in Downtown might be benefactors of a climate that is less attractive for new hotel development. The Los Angeles City Council last week finalized a deal that removes a measure from the March 2024 ballot that would have required hotels across the city to offer vacant rooms to unhoused Angelenos and replaces it with a series of new regulations to the approval process for new hotels.  Hotel trade groups embraced the new regulations as a favorable alternative to what had been proposed. But others in the industry expressed concern over the implications of these new regulations, in addition to preexisting macroeconomic conditions, on new hotel development.  A release from the Hotel Association of Los Angeles called the removal of the original measure and the concurrent approval of the replacement regulations a victory for Los Angeles and its hospitality community. The initial measure would have thrust hotel employees onto the front lines of a citywide crisis in asking hotels to provide shelter to unhoused populations, the organization said. “This solution ensures that our hotel community is thriving and able to continue providing excellent careers and economic benefits to our iconic neighborhoods throughout Los Angeles,” Hotel Association of…

Big San Jose hotel goes up for sale, deal could be market barometer

Possible hotel deal could offer clues about Bay Area lodging market strength By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group PUBLISHED: January 9, 2024 at 5:30 a.m. | UPDATED: January 9, 2024 at 2:02 p.m. SAN JOSE — The Signia by Hilton hotel, a downtown San Jose icon, is up for sale in a deal that may produce a diagnosis about the Bay Area lodging market’s health in the wake of coronavirus-spawned economic afflictions. The sale efforts involve the 541-room hotel tower at 170 South Market Street, which is the one-time northern tower of the former two-tower hotel complex in downtown San Jose. Just a few weeks ago, the 264-unit former south tower of the hotel was bought by a Bay Area real estate firm that intends to convert the facility to housing for San Jose State University students.Mill Valley-based Throckmorton Partners, acting through an affiliate, paid $73.1 million to buy the southern tower of the Signia by Hilton San Jose. That purchase price is part of an overall package valued at $113 million that includes wide-ranging revamps, upgrades and construction efforts to convert the southern tower to SJSU residences. Students could begin moving into the tower ahead of this fall’s semester. Now, the stage…

REAL ESTATEHOSPITALITY REAL ESTATE

Downtown Hotels Open in Late 2023 BY BRYNN SHAFFER | JANUARY 8, 2024 As the 96-year-old Ace Hotel Downtown Los Angeles closes its doors at the end of the month, as announced in an Instagram post in December, another downtown hotel has opened. Sonder Holdings Inc., a modern tech-enabled hospitality service based in San Francisco, unveiled its latest property, The Craftsman, just one month ago. Located at 208 W 8th St., the apartment-style hotel is an adaptation of the former Lane Mortgage Building – originally intended for office use – now featuring 110 rooms over 12 stories. The 1923 property was designed by Los Angeles architect Loy Lester Smith and sits directly across the historic Apple Tower Theater. It has since been completely renovated. “The Craftsman will be a wonderful addition to the downtown community, and I’m thrilled that the historic Lane Building is embarking on a new chapter as a Sonder property,” Shahram Delijani, a principal at downtown-based Delson Investments LLC, the owner of the building, said in a statement in anticipation of the hotel’s opening. Hospitality group Sonder has been rapidly expanding and opened another hotel downtown, named The Winfield, only a few months before that. “We’re excited to continue expanding in…

Highgate misses payoff deadline for $250M debt on Hyatt Regency SOMA

After $70M renovation of SF hotel, it’s a question of “throwing good money after bad” JAN 4, 2024, 5:02 PM | By Emily Landes Highgate Hotels has missed a balloon payment on about $250 million in debt attached to the Hyatt Regency Downtown SOMA, according to loan documents and special servicer commentary cited by Trepp.  The missed payment comes about a year after completion of a $70 million renovation of the 686-room hotel. The New York City-based hospitality property owner was up to date on its payments until last month, when the loan came due.  It bought the hotel for $315 million at the end of 2018. At the time, the property at 50 Third Street was known as the Park Central Hotel, the same name as an NYC property that Morgan Stanley-owned Highgate also bought for $366 million.  The two sister properties were purchased together from Pebblebrook, TRD reported at the time, using $250 million in financing from Blackstone. Pebblebrook was divesting hotels it gained through a merger with LaSalle Hotel Properties. The 36-month, interest-only loan was originally due to mature in December 2021, according to loan documents, but appears to have been extended for two years. Highgate did not reply to…

The Ace Hotel DTLA Will Cease Operations In Early 2024

December 13, 2023 | Bianca Barragán The Ace Hotel DTLA will cease operations at the end of January.   “It’s been an honor to inhabit these hallowed halls and The Theatre for ten golden years, which feels as good a run as any,” an Instagram post on the Ace Hotel’s account says. “We hope to be back before long and leave remembering something Mary Pickford, metaphorical matriarch of Ace DTLA, said: The future is yet in your power.” The hotel opened in 2014, when Downtown was making a powerhouse recovery from the Global Financial Crisis.  “The owners of the building that houses Ace Hotel Downtown Los Angeles, as well as The Theatre at Ace DTLA, have recently elected to convert the property to a limited-service, rooms-only operation, managed via a tech platform,” representatives for Ace DTLA told the Los Angeles Times, adding the theater would be managed separately and the last day of Ace service would be Jan. 31.  The Ace Hotel building and its adjacent former United Artists theater are owned by Aju Continuum, formerly Aju Hotels & Resorts, a subsidiary of South Korea-based Aju Group, according to the Los Angeles Business Journal and public records. The entity bought the properties for $117M in 2019.  At…

Climate-related events are impacting tourist travel decisions and hotels’ bottom lines

By Patricia Kirk | Nov 27, 2023 8:00am Climate-related events are affecting where and when tourists visit U.S. destinations and will continue to play a role in vacation decisions as Climate Change worsens.  A 2021 study by the National Institutes of Health on the impact of Climate Change on tourist destination decisions, which was published in JAMA, concluded that climate, including precipitation, wind, humidity, temperatures, ecosystems and animals are essential consideration of places where  tourists choose to visit, especially when seeking a nature experience and outdoor activities. Over the last year, US tourist destinations have been hit hard by wildfires, hurricanes, floods, heat waves, drought, and tornadoes, all of which impact hotel rates and occupancy. Alan Reay, president of Irvine, Calif.-based, Atlas Hospitality Group, says, for example, that hotels in Page, Arizona, suffered last year due to drought when the water level at nearby Lake Powell, one of the nation’s largest reservoirs and a popular sailboat destination, dropped to 26 per cent of capacity and some portions dried up, according to Nasa’s Earth Observatory. Reay, whose research and advisory firm focuses on the California’s hospitality firm, cites as examples, the recent wildfires in Maui that emptied the island’s hotels of tourists and are…

New Rules Passed For LA Hotels As Industry Worries About Development Pause

December 10, 2023 |  Bianca Barragán The Los Angeles City Council last week finalized a deal that removes a measure from the March 2024 ballot that would have required hotels across the city to offer vacant rooms to unhoused Angelenos and replaces it with a series of new regulations to the approval process for new hotels.  Hotel trade groups embraced the new regulations as a favorable alternative to what had been proposed. But others in the industry expressed concern over the implications of these new regulations, in addition to preexisting macroeconomic conditions, on new hotel development.  A release from the Hotel Association of Los Angeles called the removal of the original measure and the concurrent approval of the replacement regulations a victory for Los Angeles and its hospitality community. The initial measure would have thrust hotel employees onto the front lines of a citywide crisis in asking hotels to provide shelter to unhoused populations, the organization said. “This solution ensures that our hotel community is thriving and able to continue providing excellent careers and economic benefits to our iconic neighborhoods throughout Los Angeles,” Hotel Association of Los Angeles President and CEO Heather Rozman said in a statement.  New regulations would require new hotel developments to replace any…

Costly regulations putting some California coastal hotel projects over the financial tipping point

By Patricia Kirk | Dec 6, 2023 8:00am California’s coast is a popular tourist destination that attracts visitors globally year-round, making it a lucrative hospitality market. But hotel investors and developers considering projects along the California coast should do their homework before entering this market. California is well known among developers for high barriers to entry, which include local government entitlement and permitting timetables that can hold up projects for a couple of years or more. But developing in coastal zones adds another layer of scrutiny and bureaucracy that increases the time and cost of projects, as they are subject to restrictions, requirements, and approval by the California Coastal Commission (CCC).  The CCC is an independent, quasi-state agency, which was established in 1972 by a voter initiative, to plan and regulate water and land use in the coastal zone, as well as to ensure coastal access to all residents, regardless of their economic means. The CCC is responsible for overseeing and enforcing the Coastal Act, which broadly defines development activities, including construction of buildings, divisions of land, and activities that change the intensity of land use or public access to coastal waters.  With the high cost of financing and construction right now,…

Los Angeles Hotel Sales Evaporated This Year, But Olympics, World Cup Await

November 30, 2023 | Bianca Barragán, Southern California  It’s hard out there for Los Angeles-area hoteliers, but many are steadfast in their belief that better times are just around the corner — for those that can hang on.  Atlas Hospitality Group President Alan Reay told the audience at Bisnow’s Los Angeles Hospitality Summit at the Omni Hotel and Resort Los Angeles that year-to-date, Los Angeles County hotel sales are down nearly 80% compared to the same period in 2022. Just 17 hotels have sold so far this year, in stark contrast to the 79 that traded in the same period last year. “There’s only ever been one time that we’ve seen such a decline like that, and that was back in 2009,” Reay said.  That slowdown in transactions is keeping a vicious cycle rolling.  “The problem with underwriting in LA today is that you don’t have an exit that you can underwrite,” said Adrienne Jubb, Aimbridge Hospitality senior vice president of development and acquisitions. “It’s hard to get investors excited about LA because of the lack of exits,” Jubb added.  Panelists touched on “social issues,” such as the growing unhoused population, as another headwind facing Los Angeles.  “Branding is very important,” The Athens Group Chief Operating Officer Jay…

Developer BPM defaults on $127M loan tied to Anaheim’s Viv Hotel

326-key hospitality property stands about a mile from Disneyland and opened in 2020 By Isabella Farr |NOV 20, 2023, 5:00 PM BPM Real Estate Group has defaulted on a $127 million loan tied to an Anaheim hotel project, The Real Deal has learned.  BPM, based in Portland, used the loan to build the 12-story, 326-key Viv Hotel at 1601 South Anaheim Boulevard. But as of Nov. 1, BPM owed about $145 million under the construction loan, according to a notice of default filed with Orange County.  BPM did not respond to a request for comment. Miami-based commercial lender 3650 REIT provided a $115 million senior construction loan for the project in 2018, a release at the time said, shortly after the developer scored entitlements to build the hotel.  BPM opened the hotel in 2020 — originally under the Radisson Blu brand — but needed more money. The loan from 3650 REIT was upsized in September 2022 to $127 million, according to the default notice.  Under California law, a foreclosure for the property can be scheduled no earlier than Feb. 11. BPM can legally sell the property before a foreclosure takes place.  The hotel, now called the Viv, is located about a mile from…

San Jose hotel is poised to benefit from SJSU student housing deal

Signia Hilton plans new restaurant, lounge, other other amenities at downtown San Jose hotel By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News GroupPUBLISHED: November 20, 2023 at 11:20 a.m. | UPDATED: November 20, 2023 at 1:34 p.m. SAN JOSE — A landmark downtown San Jose hotel is poisedto benefit from the sale of one of its two towers for San Jose State Universitystudent housing — and a new restaurant, lounge and other amenities are also inthe works after the $73.1 million deal. The Signia by Hilton San Jose, now a 541-room hotel, is eyeing significantupgrades in the wake of a deal whereby the Throckmorton real estate firm boughtthe hotel’s former southern tower as a crucial step to transform the high-riseinto housing for SJSU students. SJSU will lease the southern tower fromThrockmorton. Mill Valley-based Throckmorton Partners, acting through an affiliate, paid$73.1million to buy the southern tower of the Signia by Hilton San Jose,documents filed on Nov. 17 at the Santa Clara County Recorder’s Office show.Throckmorton bought the southern tower through an all-cash deal. The hotel, which was formerly the Fairmont and is now owned by a group headedup by Bay Area business executive Sam Hirbod, has a greatly improved occupancylevel…

Is San Francisco a challenge or opportunity for hotel investors?

By Nellie Day | Nov 20, 2023 8:00am There are many who would argue that San Francisco’s facing an image problem. Alan X. Reay, president of Newport Beach, Calif.-based Atlas Hospitality Group, which specializes in the sale of California hotels, would be one of them. “The city has to completely change the perception of the rampant crime and homelessness,” he says. “It has been covered extensively in the press and on TV, and is a huge negative for tourism and, more so, for anyone planning a convention or meeting.” Some might argue it’s a huge negative for current and would-be hotel investors as well. Trepp released a report in August that analyzed how San Francisco’s crime has impacted the city’s businesses and commercial real estate, hospitality included. The report notes that 90 percent of the city’s property crimes take place in Union Square, South of Market (SoMa), Fisherman’s Wharf and Japantown, in that order. “Out of all the identified high-crime locations, more than 65.1 percent experienced stagnating business growth or even losses,” the report states. “This finding indicates that the majority of locations with declining businesses are surrounded by high-crime areas, emphasizing the detrimental effects of persistent crime on business vitality.” The…

Contact details

Recent Listings