Atlas in the news
Bay Area hotel market wobbles in San Jose, San Francisco, Oakland
Famed San Francisco hotel’s “non-performing” loan gets shopped to buyers By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News GroupPUBLISHED: March 1, 2023 at 5:30 a.m. | UPDATED: March 1, 2023 at 1:28 p.m. Fresh signs have emerged that the Bay Area’s hotel market is wobbly — including efforts to scout for one or more investors willing to take over a faltering loan for a lodging icon that’s perched atop San Francisco’s famed Nob Hill. The Stanford Court Hotel, a historic lodging site at 905 California Street and one of the best-known hotels in the region, is the focal point of an attempt to find a new holder of the loan on the property, according to a marketing flyer reviewed by this news organization. The primary financing vehicle for The Stanford Court Hotel is a “non-performing senior loan with a total outstanding balance of $108.2 million,” stated the marketing package that’s being circulated by Eastdil Secured, a commercial real estate firm. Stanford Court isn’t the only historic hotel on Nob Hill that faces a delicate financial situation. The next block over, at 1075 California Street, the Huntington Hotel is in default on a $56.2 million loan on the property, San Francisco county records show. Deutsche Bank, the…
Report: Buyer Demand for CA Hotels Remains Strong
HOSPITALITY: 510 Transactions Total $8.6B in 2022 BY: KAREN PEARLMANAPRIL 6, 2023 After a record year in 2021 with 510 hotels transacted, buyer demand for hotels in California remains strong. The Newport Beach-headquartered Atlas Hospitality Group reports in its 2022 Year-End California Hotel Sales Survey, that last year marked the second-highest number of individual hotel sales at 483, down just 5.3% over 2021. Alan Reay, president of Atlas Hospitality Group, also reported that sales were at their third highest in dollar volume at $8.598 billion, with a new record for median price per room at $151,636. Reay reports that is up 10% over the record set in 2021. Reay said that at midyear 2022, experts actually had predicted a slowdown in the second half of the year with what was happening with interest rates, “but that simply didn’t happen.” “That tells us that buyer demand for hotels in California remains very strong,” he said. San Diego County had a 30.6% decrease in individual transactions, from 49 to 34. Total dollar volume was down 33%. The county’s average price per room increased 15.4%, while the median price per room decreased by 4.2%. Atlas reports that the 417-room Hyatt Regency La Jolla…
2023 Development Update: Los Angeles
Revamped icons and bold newcomers help shape LA’s hospitality renaissance Words by: Will Speros • Photos by Sam Frost, Caylon Hackwith, and the Ingalls Although 2022 saw rising costs lead to a slowdown in Los Angeles hotel development, Atlas Hospitality Group reports, the city still closed the year with the third-biggest hotel construction pipeline in the U.S. According to Lodging Econometrics, LA entered 2023 with 122 projects and 19,419 guestrooms in the pipeline, and also held the second-highest number of projects in early planning at 61. Indeed, the market is no match for a destination that senior vice president Bruce Ford says is experiencing “a big wave of renovation and conversion activity.” Here, we explore a few of these newcomers, from revamps of existing icons to new-builds changing the LA skyline. The Georgian Designed by Fettle, the newly reborn Georgian hotel reinterprets Art Deco themes in its Sunset Bar One particular city landmark, the Georgian, is newly reborn following an acquisition by hospitality development company BLVD. The local office of architecture and design practice Fettle was tapped to set a new course for the future of Santa Monica’s First Lady. “The idea was really to restore the building to her former and…
Appraisal Meant to Determine if Housing Commission Overpaid for Pandemic-Era Hotel Can’t Answer That Question
by Andrew Keatts | March 17, 2023 It didn’t answer the question. The San Diego Housing Commission released to the City Council Thursday the new appraisal of a Mission Valley hotel it bought to turn into housing for formerly homeless people. Nearly three years ago, the Housing Commission acquired the property for $67 million with the help of a broker who, the agency later learned, bought 40,000 shares in the company that sold the hotel before he identified it as a target and negotiated the purchase price. The controversy immediately raised the question: Did the city overpay for the hotel that was purchased under the cloud of a conflict of interest-scandal? That’s because of the original purchase appraisal. The appraiser determined the value of the hotel as though it was February 2020. But the city bought the hotel in August 2020, after Covid-19 completely shut down the tourism industry. Why Housing Commission officials would backdate the appraisal and what the hotel would have been worth if they had not has been unclear. After the broker faced a lawsuit from the city for his alleged conflict of interest and the scandal set in, the Housing Commission set in motion a new appraisal to clear it all up. But…
Over-the-top bar and restaurant scene, high-rise hotels set to open in downtown L.A.
BY ROGER VINCENT STAFF WRITER Photography by ROBERT GAUTHIER APRIL 3, 2023 5 AM PT A high-rise with two hotels and an over-the-top restaurant and bar scene is set to open this month by Crypto.com Arena in downtown Los Angeles as travelers embrace the road again and the hospitality business climbs out of the crater it sunk into during the pandemic. The builders hope that events at the arena and the adjacent Los Angeles Convention Center will drive overnight business to the hotels and help tempt locals to cavort in the 12 bars, restaurants and clubs that will be a prime feature of the Moxy and AC complex at Figueroa Street and Pico Boulevard. Moxy and AC are hotel brands operated by Marriott International, which is already the biggest hotelier in the neighborhood with the JW Marriott and Ritz-Carlton at L.A. Live as well as an adjacent tower containing both Courtyard and Residence Inn hotels. Marriott put multiple brands in downtown L.A. to serve a range of reasons people travel such as leisure, business and conferences, said Chief Executive Anthony Capuano. With the new hotels, Marriott will manage 3,200 rooms in six inns. The hostelries are part of billions of dollars of development that has transformed…
California hotel sales finish 2022 better than expected
CHERYL SARFATYTHE NORTH BAY BUSINESS JOURNALMarch 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….
Residence Inn sells for $28M in East Bay
Transaction aligns with declining hotel room values San Francisco / September 16, 2022 08:30 AMBy Pawan Naidu | Research By Christian Bautista and Caysey Welton Hotels aren’t worth what they used to be, but they’re still worth a lot. A Residence Inn hotel in an East Bay suburb sold for $28.5 million, or $226,000 per room, according to public records. Despite the somewhat sizable transaction, the buyer and seller have been mostly flying under the radar in California real estate. The seller was real estate investor Rao Yalamanchili, who’s been busy this year in the residential sector, adding $68 million to his portfolio with the acquisition of three properties. The buyer is listed as Los Angeles-based Five Rivers Hospitality LLC. A thorough search yields very limited information on the entity. It was registered as an LLC by Jagpreet Sandhu in February of this year, according to California state records. Residence Inn by Marriott Pleasant Hill Concord is located at 700 Ellinwood Way in Pleasant Hill and has 126-units. The 50,700 square-foot hotel was built in 1991. Yalamanchili purchased it three years ago for $25.3 million. The Residence Inn–which operates under the Marriott brand umbrella–sold for less than a recent traditional hotel transaction in the bay area when Pebblebrook Hotel Trust sold…
Bay Area hotel purchases slump amid inflation, price uncertainty
Hotel purchases show weakness during first half of 2022 By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group PUBLISHED: September 12, 2022 at 1:30 p.m. | UPDATED: September 13, 2022 at 4:56 a.m. The Bay Area market for hotel purchases slumped during the first half of 2022 compared to the same period the year before amid inflation woes and fast-rising interest rates. The total dollar volume for hotels bought in the nine-county Bay Area was $660.5 million, according to research Atlas Hospitality Group provided to this news organization. That was down 66.8% from the $1.99 billion in hotel purchases during the first six months of 2021, the Atlas Hospitality research showed. “Interest rates and inflation are increasing, which makes it harder to complete deals,” said Alan Reay, president of Atlas Hospitality, which tracks the California lodging market. The challenges have arisen despite the easing of COVID pandemic restrictions and a corresponding increase in the number of people traveling. But the hotel market is not alone — rising interest rates and inflation have also plagued the state’s housing and office markets, as well, causing some would-be buyers to reconsider. It appears that the Bay Area hotel market is considerably weaker than the lodging sector statewide. During the…
Analysts Make Case for Optimism on Hotel Performance for Rest of Year (skift.com)
Sean O’Neill, Skift September 9th, 2022 at 2:00 AM EDT Skift Take Talk of inflation has soured some people on the prospects for hotels for the rest of the year. But some analysts, such as CBRE and Truist, have upgraded their views. Plus, Asia’s recovery and other news items. — Sean O’Neill Sunday, Sept. 4 After a record-breaking 2021 for hotel sales in California, hotel transactions have cooled off in the state in the first six months of this year, reported the San Diego Business Journal, citing data from Atlas Hospitality Group. The number of individual hotel sales declined by 9.9 percent and total dollar volume is down 33.6 percent thus far in 2022, according to Atlas. The median price per room has increased by 12.7 percent statewide, year-over-year, to a new California record of $143,443. Skift Note: The Atlas Hospitality Group data dovetails with reports from Lodging Econometrics and others showing an overall U.S. slowdown in hotel construction and development in 2022 from the momentum of January.
After Slowdown in Property Sales, ‘Repricing’ Becomes This Summer’s Dreaded Word
Rising Interest Rates, Other Economic Challenges Plague Commercial Real Estate Nationally By Ryan Ori | CoStar NewsAugust 23, 2022 | 10:53 AM Summer lulls are nothing new in commercial real estate, but this year’s slowdown in deals is more pronounced because of one word that has defined the season: repricing. Rising interest rates, inflation and worries of a recession have caused a reset on prices, prompting sellers to accept a less satisfying price or pull properties from the market in hopes of a better offer later. The result has been a drop in deals this spring and summer, with no clear timeline for when the market will recover. “The lender pool isn’t as deep, the buyer pool isn’t as deep and everyone’s being cautious about making a move,” said Jim Postweiler, a Newmark broker who sells office buildings in the Chicago area and throughout the Midwest. U.S. transaction volume fell in all three months of the second quarter after the Federal Reserve began raising interest rates, according to a CoStar report. Transactions involving real estate investment trusts fell to $11 billion in the second quarter, down from $16.7 billion in the first quarter, according to Nareit, a trade group for the…
Atlas Report Shines Spotlight on Hotel Sales in California
HOSPITALITY: Hotel Transactions Cooling Off in 2022 BY KAREN PEARLMAN | SEPTEMBER 2, 2022 After a record-breaking 2021 for hotel sales in California, including the highest number of individual hotel sales and total dollar volume sales in San Diego County, hotel transactions have cooled off in the state and region in the first six months of this year. Statewide, the number of individual hotel sales declined by 9.9% and total dollar volume is down 33.6% thus far in 2022, according to Irvine-based Atlas Hospitality Group, which keeps tabs on hotel transactions in California. Those numbers are part of Atlas Hospitality Group’s 2022 mid-year California Hotel Sales Survey released late this summer. In San Diego, 25 hotels were sold in the first six months of 2022, compared to 28 sold in the same time frame of 2021, a decline of about 11 percent. The most expensive local hotel sale of 2022 as reported by Atlas was the 126-room Moxy Hotel in downtown San Diego at $46 million; next highest was the 90-room Inn at Rancho Santa Fe at $42.7 million; and third most expensive was the 90-room Courtyard San Diego Gaslamp/Convention Center at $41 million. Alan X. Reay, president of Atlas Hospitality…
California hotel buyers’ price per room goes up, deals down
Focus shifts to luxury properties even as cost for capital climbs Los Angeles Archive / August 18, 2022 02:30 PMBy Isabella Farr If you’re looking to buy a hotel in California, expect to pay a record median price per room. The median price for a hotel per room hit $143,400 in the first half of this year — up 13 percent compared to the same period in 2021, according to a report from hospitality brokerage firm Atlas Hospitality Group. But overall sales have declined. In the first six months of the year, 263 hotels in California traded hands, compared to almost 300 that sold in the first half of 2021, according to the report. Investors have poured a total of $3.5 billion into hotels so far this year — down 33 percent from the same period last year. The slowdown is expected to continue through the second half of the year, as rising interest rates start to affect deals. “There is still high buyer demand, but the prices they can afford to pay today are different from what they were six months ago,” Atlas Hospitality CEO Alan Reay said. “That’s because of the cost of capital.” Reay said he’s already seeing some deals for hotels…
