Atlas in the news

We are big believers in SF’: Hotel owners bet big on city’s revival

SFGATE contributor Randy Diamond recaps the latest in San Francisco hotel news for the column Get a Room By Randy Diamond | Aug 30, 2024 This week in Get a Room, SFGATE’s roundup of news on hotels and accommodations in San Francisco, we check in on the Hilton and Parc 55. The city’s largest hotel, the Hilton San Francisco Union Square, is in flux after its investors defaulted on their loan last year. During a recent visit, the disarray was hard to miss. Compared with other cities, the industry in San Francisco continues to lag in its recovery, but optimism isn’t hard to find — as suggested by a new hotel with a clear vision from its investors for the city. Elsewhere, a hotel in Fisherman’s Wharf was awarded top marks in an annual readers’ poll (with one visitor saying it has “the coolest atmosphere of any hotel I’ve been to”). The market’s volatility is on display as a former startup unicorn that disrupted the lodging industry now faces a rough road after a sharp financial tumble. A candidate to become San Francisco’s next mayor is tied to the local company as it revamps by partnering with a legacy hotel brand to weather the…

Report: California Hotel Sales Plummet in 2024 Amidst High Interest Rates and Pricing Disconnect

August 20, 2024 | By The Registry Staff The recently published Atlas Hospitality Group’s 2024 Mid-Year Sales Report shows California’s hotel market is facing significant challenges this year, driven by higher interest rates and a disconnect between buyer and seller price expectations. These factors have created substantial downward pressure on hotel sales volumes across the state. As a result, California’s hotel sales volume has dropped by 48.5 percent compared to the same period in 2023, with individual sales also experiencing a decline of 1.6 percent.  This marks the fourth-lowest sales volume since tracking began, underscoring the severity of the current market conditions. The median price per room in California has fallen to $149,262, representing a 7.2 percent decrease from the previous year. “We have seen a dramatic decline in the total dollar volume of California hotel sales during the first six months of 2024, down 48.4 percent,” said Atlas Hospitality Group President Alan Reay. “This is the result of fewer larger hotel sale transactions, which is due in large part to the discrepancy between buyer and seller price expectations and the difficulty in obtaining financing. On the other hand, we are still seeing smaller hotels trading, where buyer and seller price…

Napa, Sonoma, surrounding counties’ hotel sales, development slow midyear as lenders remain risk-averse

The North Bay saw few hotel sales and development projects through the first half 2024. Only one new hotel opened, the 99-room Wyndham Garden Inn Redwood Valley in Mendocino County. CHERYL SARFATY | THE NORTH BAY BUSINESS JOURNAL August 19, 2024, 10:30AM Hotel sales and development plans in California as of June 30 continued to reveal a downward trend, according to a real estate firm that tracks the state’s hotel industry. In the North Bay, the decline since the end of 2023 was most evident among hotel sales, with three of the six counties — Marin, Lake and Solano — reporting no hotel sales at all, according to Atlas Hospitality Group, a Newport Beach-based real estate brokerage that specializes in hotel properties across California. “The prices that the sellers are looking for are not in sync with buyers’ expectations, and (that is) why buyers have opted to purchase hotels in other markets,” Alan X. Reay, president and founder of Atlas, told the Business Journal. Atlas recently released its midyear hotel surveys, one for sales, the other for development plans. It also produces year-end surveys. The State of Hotel Sales As of June, 13 hotels had sold in the North Bay. The…

MetLife, Loews put Hollywood hotel up for sale — at big discount

Guidance price of $125M for 625-room property is $40M less than 2012 purchase By Isabella Farr | AUG 15, 2024, 11:30 AM MetLife Investment Management and Loews Hotels & Resorts have put their Hollywood hotel up for sale — with a steeply discounted price tag. The firms have listed the Loews Hollywood Hotel with a guiding price of $125million — about $40 million less than what Loews paid for the property in 2012, according to Real Estate Alert. The guidance price comes out to about $200,000 per room. MetLife, which formed a joint venture with Loews in 2012 and holds a 50 percent stake in the hotel, did not respond to a request for comment. Eastdil Secured holds the listing. The 625-key hotel, which sits on the edge of Ovation Hollywood, a shopping mall formerly known as Hollywood and Highland, is pitched as a redevelopment opportunity — or a chance for a new brand to take over. After Loews and MetLife bought the property at 1755 Highland Avenue, the duo planned a $26 million renovation of the hotel. In 2021, Loews and MetLife scored $91 million from Värde Partners, an alternative investment firm, to refinance the 625-key hotel, replacing debt…

Pacific Edge Hotel Sold for $80M; to Undergo Renovation

By Emily Santiago-Molina | August 12, 2024 A California-based hospitality investment entity with ties to the Marriott family has bought Laguna Beach’s Pacific Edge Hotel, the Business Journal has learned. The hotel has traded hands for $80 million, or $640,000 per key, in a deal making it the largest hotel sale in California so far this year. New York-based Highgate Hotels LP and Morgan Stanley & Co., which purchased the property together in 2017 for $57.5 million, sold the 125-room property to Dune Drifter, a new entity. It is the state’s highest priced transaction in the first six months of this year, according to Alan Reay of Atlas Hospitality. The standing top deal in Orange County remains the purchase of the 260-room Montage Laguna Beach by Tilman Fertitta for $650 million, north of $2.5 million per key, in late 2022. Pacific Edge fronts the ocean on Sleepy Hollow Lane and is about half a mile south of Broadway Street and the main entry to the downtown district. Patrick Deming from Eastdil Secured LLC was the listing broker. Via this local takeover from New York’s Highgate, the new owners will ensure that the renovation and business plans submitted to the city…

Hotel sales in California plunge nearly 50% in first half of year

Lodging market experts blame interest rates and operating costs for investor absence By TRD Staff | Aug 13, 2024, 11:00 AM Hotel sales across the Golden State have turned to lead. In the first half of the year, hotel sales in California sank 48.5 percent to $1.19 billion year over year,the San Jose Mercury News reported, citing figures from Atlas Hospitality Group. In Northern California, investors plunked down $447.5 million for hotels, 36.9 percent less than they paid a year ago. In Southern California, they paid a combined $739.4 million, 53.7 percent less. “The lingering impact of higher interest rates, combined with the rise in operating costs, particularly in labor and insurance, are holding down sales volume and prices,” Atlas Hospitality Group, based in Newport Beach, reported. An equally dour report in February said California hotel deals totaled a combined $3.76 billion last year, compared with $8.6 billion in 2022, as investors sat on the sidelines. There were three major hotel deals in the Bay Area between January and June ,according to the brokerage firm, which tracks the lodging market across the state. In Alameda County, an unidentified investor bought the 148-room La Quinta Inn in Oakland for $12 million,…

Hotel sales in San Diego drop 54%. Here’s why

It’s the steepest decline in more than a decade. By LORI WEISBERG | The San Diego Union-Tribune UPDATED: August 12, 2024 at 12:57 p.m. The number of hotel sales in San Diego County has hit another low mark, falling 54 percent during the first half of this year compared with a year earlier, which is the steepest decline in more than a decade. Not only were individual transactions down markedly, but the dollar volume was as well, falling 51 percent from $200.4 million a year ago to $97.5 million during the first six months of 2024, according to a newly released report from Orange County-based Atlas Hospitality Group. That is the fifth steepest decline since 2009, Atlas said. Market trends in San Diego mirror what’s going on across the state. Statewide, the dollar volume of hotel sales was down 48.5 percent, although individual transactions only dipped 1.6 percent, Atlas reported. The brokerage firm, which tracks hotel sales and development in California, said the total dollar value of sales activity statewide was the fourth lowest since it’s been tracking real estate transactions in the lodging industry. What’s noticeable from the latest report, says Atlas President Alan Reay, is the absence of…

Hotel sales implode in Bay Area and California as lodging woes widen

High interest rates and inflation weigh down hotel sector By George Avalos | gavalos@bayareanewsgroup.com | Bay Area News Group UPDATED: August 9, 2024 at 4:24 p.m. SAN JOSE — Hotel purchases have imploded in California and the Bay Area, a fresh sign that post-coronavirus economic ailments, including high interest rates, still impair the weak lodging sector statewide. Investors paid an aggregate of $447.5 million for hotels in Northern California during the first six months of 2024, according to a new report from Atlas Hospitality Group, which tracks the lodging market in the state. Sales volume for hotels in Northern California nosedived 36.9% from the same six-month period in 2023, Atlas Hospitality reported. Southern California purchase activity totaled $739.4 million over the first six months of 2024, which Atlas Hospitality estimated was down 53.7% from the same half-year period the year before. California hotel buying volume totaled $1.19 billion during the first half of this year, which was down 48.5% from the prior year’s initial six months. Three hotel deals were of interest during the first six months of the year in what was a brutal market for hotel investment activity, according to Atlas Hospitality: — Alameda County: One hotel was purchased, Oakland’s 148‐room La Quinta…

California Hotel Deals Dollar Volume Drops Nearly 50% in First Half of 2024

Deals Pace Expected To Increase in Second Half of Year By Bryan Wroten | Hotel News Now | August 9, 2024 | 6:50 AM California hotel deals dollar volume during the first half of 2024 dropped nearly 50% compared to the same period in 2023. The California Hotel Sales Survey 2024 Mid-Year from Atlas Hospitality Group found that the dollar volume dropped to almost $1.2 billion through the first two quarters, down from $2.3 billion in the first half of 2023. The number of individual deals, however, only dropped from 124 to 122, a 1.6% year-over-year decline. Atlas Hospitality President Alan Reay said the number of hotel sales during the first quarter of the year were down dramatically and picked up during the second quarter. He had expected a drop in the second quarter as well. The decrease in dollar volume in the first half of the year comes after an already depressed first six months in 2023. “So, we’re still at a pretty low number,” he said. In fact, this may be the fourth-lowest dollar volume in the 25 years Atlas Hospitality has been tracking hotel sales in the state, Reay said. Those other years were in 2009 and 2010,…

San Jose Signia by Hilton closes in on refi for $165M debt

Eagle Canyon Capital looks for fresh capital after selling hotel tower for student housing Aug 1, 2024, 6:02 PM | By TRD Staff The ownership group of a prominent hotel in downtown San Jose claims to be close to a refinance of its $165 million debt package even as the holder of a $29 mezzanine loan is looking to sell the note. Commercial brokerage JLL has been hired to peddle Eagle Canyon Capital’s secondary loan on the Signia by Hilton, the San Jose Mercury News reports. Eagle Canyon Capital in San Ramon, led Sam Hirbod, sold one of the project’s two towers to student housing specialist Throckmorton Partners for $73 million and continues to operate 541 rooms in the remaining building at 171 Market Street.  JLL marketing materials point to ongoing distress despite money from Mill Valley-based Throckmorton, referring to the $29 million loan as “non-performing.” Brightspire Capital is selling the loan; it’s unclear if the Los Angeles-based firm also holds the main $136 million note on the property. New financing for the hotel is in the works, according to the Mercury News, which cited unnamed sources who said the owners are near a package that could stabilize the property. The 243-room…

California Hotel Development Struggles in Current Lending Environment

July, 30 2024 | Excerpt from CoStar Twenty-two hotels opened in California during the first half of the year, according to a midyear survey, highlighting the ongoing challenges hotel developers face across the U.S. and in California in particular. Atlas Hospitality Group’s California Hotel Development Survey Mid-Year 2024 reports that the 22 openings were an increase over the 20 that opened in the first half of 2023, but the 2,289 rooms that opened were a 15% year-over-year decrease. While the number of hotels in construction remained at 122, the number of rooms in construction dropped from 16,321 to 15,468. What stood out to Alan Reay, president of California-based Atlas Hospitality, is significant increase in the amount of projects in the planning phase that have been abandoned or deferred, though be believes that’s understandable considering what’s going on with financing and other factors. On top of that, the number of projects that have broken ground and are under construction that have completely stopped is also up higher than previously seen, he said. There are about four or five hotel projects in the Coachella Valley that have stopped construction. There are another three or four in Los Angeles, and there’s also some…

Report: California’s Hotel Industry Shows Decrease in Rooms, New Hotels

July 30, 2024 | By Lilly Riddle The first half of 2024 presented a nuanced landscape for hotel development in California, according to a recent report from Atlas Hospitality Group. A 10 percent increase in new hotel openings compared to the same period in 2023 indicated continued growth, but this was counterbalanced by a 15 percent decrease in the number of rooms available. This data, compiled by Atlas, reveals a complex interplay of factors influencing the state’s hotel industry. In Southern California, Los Angeles County saw four new hotels open, including the 150-room Cambria Suites Burbank. However, the county’s overall pipeline of rooms under construction experienced a slight decrease. This suggests that developers are proceeding cautiously amidst rising financing and construction costs. The Inland Empire region presented a varied picture, with no new openings in Riverside County, while San Bernardino County welcomed two new hotels, including the 128-room Hampton Inn in Big Bear. San Diego County bucked the trend of decreased room availability with the addition of the 179-room SpringHill Suites Chula Vista Eastlake. This project, along with the ongoing construction of the 1,600-room Gaylord Bayfront Hotel (the largest in the state), demonstrates a degree of confidence in the region’s long-term…

Contact details

Recent Listings