Atlas in the news
New Hotel Openings in California Are Up, but Hotel Construction Is Down
https://www.costar.com/article/1156168595?utm_source=newsletter&utm_medium=email&utm_campaign=hospitality&utm_content=p1 Pandemic-Related Hurdles Slow New Projects By Bryan Wroten Hotel News Now July 19, 2021 | 6:28 AM California’s hotel development trends are showing the effects of both recovering demand as well as lasting pandemic challenges. The number of hotels that opened in California in the first half of 2021 increased 46% year over year, but the number of hotels and hotel rooms in construction both dropped by 32%, according to Atlas Hospitality Group’s “California Hotel Development Survey 2021 Mid-Year.” Fifty one hotels opened during the first six months of the year, and the number of new rooms opening doubled compared to last year from 3,500 to 7,168. At the same time, the number of hotels under construction dropped from 194 to 132, and the number of rooms fell from 26,418 to 17,962. The number of hotels and guest rooms in the planning stage remained stable year over year, growing from 1,240 hotels to 1,246 and from 163,904 rooms to 164,676. The jump in hotels and guest rooms opening during the first half of the year isn’t surprising, Atlas Hospitality President Alan Reay said. The pace of openings picked up in May and June as owners held off on opening until…
Why hotel investors and developers are flocking to the South Bay this year
https://www.bizjournals.com/sanfrancisco/news/2021/07/19/santa-clara-hotel-boom-construction-pipeline-new.html By Alex Barreira Staff Reporter, San Francisco Business Times July 19, 2021 Through the first half of the year Santa Clara County is Northern California’s leading submarket for new hotels, with more new properties opening up, under construction and in planning than anywhere else in the Bay Area and nearly the same for the rest of the state. Across the nine Bay Area counties 14 new hotels debuted from new construction, ranging from the 12-room Calistoga Motor Lodge in Napa to the 200-room Shashi Mountain View, according to the just released mid-year report from hotel consultancy and brokerage Atlas Hospitality. Six of the region’s new hotels are in Santa Clara county, where huge demand generators and a comparatively easier path to new construction than San Francisco are fueling optimism, despite construction and staffing labor and building materials like lumber and steel at a premium. “Santa Clara has been one of the hottest hotel markets in the entire country,” said Alan Reay president and CEO of the Irvine-based Atlas Hospitality. “Many hotel developers see this market as offering terrific long term potential, due to the focus on tech and life science industries.” Santa Clara accounts for about 18% of Northern California’s…
Why the sale of two S.F. hotels is an encouraging sign for the local hospitality market
https://www.bizjournals.com/sanfrancisco/news/2021/07/13/park-hotels-adagio-meridien-sales-price-urban-sf.html By Alex Barreira – Staff Reporter, San Francisco Business Times Jul 13, 2021 Updated Jul 13, 2021, 3:08pm PDT Two more large San Francisco hotels are changing hands, with Park Hotels & Resorts announcing Tuesday it is selling the 360-room Le Meridien San Francisco and the 171-room Hotel Adagio in separate transactions to undisclosed buyers. But rather than being another harbinger of doom, experts say the sales prices are an encouraging sign of the hospitality industry’s belief in San Francisco’s near-term value and potential for a robust recovery. The deals also provide a contrast to a recent report showing the city as having the most the steepest fall in revenue per available room in the country. The total proceeds on the sales will be $303.5 million, or about $572,000 per key. For the Le Meridien, which sits on Battery Street near Embarcadero Center, gross proceeds will be $221.5 million (about $615,000 per key). For the Adagio, located west of Union Square, gross proceeds will be $82 million (about $480,000 per key). The sales are expected to close in the next 60 days. Park Hotels (NYSE: PK) said the capitalization rate on 2019net operating income was 5.9% and 6.6%, respectively —itself perhaps an indication…
Anaheim’s Allure: $200M+ Of Hotel Sales in Region
https://www.ocbj.com/news/2021/jul/05/anaheims-allure-200m-hotel-sales-region/ TOURISM: DOUBLETREE, CANDLEWOOD ARE LATEST HOTELS TO TRADE By Katie Murar Monday, July 5, 2021 A pair of hotels in the vicinity of the Anaheim Resort region have traded hands in separate deals topping $100 million, the Business Journal has learned. The two deals, coming on the heels of three other recent transactions previously reported in Anaheim that totaled another $120 million, mark the latest sign of rising investor interest for properties that cater to Orange County’s largest tourist base, which is beginning to see increased activity amid loosening travel restrictions in the state. The DoubleTree by Hilton Hotel Anaheim, a 461-room hotel in Orange not far from the Anaheim Resort region, is the latest notable area property to change hands. AWH Partners LLC and Apollo Global Management Inc., both of New York, are the buyers for the DoubleTree, which is next to the Outlets at Orange shopping center. It’s the largest hotel in the city of Orange, and ranks No. 18 among all hotels in OC by total room count. At 19 stories, it and Fashion Island Hotel (see story, page 3) are OC’s tallest hotels. The DoubleTree marks the first local buy in the county for the AWH-Apollo joint venture. Spire Hospitality, the Irving,…
Sunstone is Hotel Seller No More
https://www.ocbj.com/news/2021/may/10/sunstone-hotel-seller-no-more/ HOSPITALITY: $265M FOR WINE COUNTRY RESORT By Katie Murar Monday, May 10, 2021 After a selling season that spanned nearly four years, Sunstone Hotel Investors has returned to the market as a buyer, spending $265 million for a recently built hotel in Northern California that’s tops for the state since the onset of the pandemic. The Irvine-based real estate investment trust (NYSE: SHO) paid a little more than $2 million per key for the 130-room Montage Healdsburg in Sonoma County, in a deal that closed late last month. The purchase is the first deal for Sunstone since 2017 and brings its hotel portfolio to 18, about half what it was at the end of 2014. The acquisition “is consistent with our stated tactics of acquiring long-term relevant real estate in the early phases of a cyclical recovery,” Sunstone Chief Executive John Arabia said at the time of the sale’s announcement. Record Sale Affiliates of Ohana Real Estate Investors sold the Montage Healdsburg about three years of joining the project. “This sale reflects the strong interest from investors in best-in-class, leisure-oriented resorts as the hotel industry begins to recover from the effects of the COVID-19 pandemic,” said James Cole, head of asset management at Ohana. Redwood City-based Ohana…
Short-Term Rental Companies Prosper During Pandemic
https://labusinessjournal.com/news/2021/may/17/short-term-rental-companies-prosper-during-covid/ By Hannah Madans Monday, May 17, 2021 Despite tough regulations and a pandemic that pummeled the Los Angeles hospitality industry, local vacation rental operators are thriving. West Hollywood-based AvantStay Inc. and Beverly Hills-based Nightfall Group are seeing a surge in demand. Bookings with AvantStay, a short-term rental company that operates in 60 cities, including Malibu, are “really off the charts,” said co-founder Sean Breuner. “We’re up three (times) year over year in terms of demand,” he said. Many travelers shied away from hotels during the pandemic and instead escaped to short-term rentals, where they could hunker down and avoid crowds. Now that large venues and attractions are reopening, and more Americans are rolling up their sleeves to get immunized against Covid-19, industry experts predict short-term rentals will continue to pose stiff competition for hotels. In March 2020, at the start of pandemic shutdowns, occupancy levels at short-term rental properties were at 47.2%, compared with 58.2% the previous year, according to data from AirDNA, a group that tracks 10 million vacation rentals worldwide, including those listed on Airbnb Inc. Those numbers ended up climbing during the pandemic, and occupancy in March jumped by 29.1% from March 2020 levels and by 4.6%…
COVID hospitality: Two Silicon Valley hotels head for auction block and foreclosure
Hotels in Mountain View, Sunnyvale face seizure through loan foreclosure https://www.eastbaytimes.com/2021/04/26/covid-real-estate-two-silicon-valley-hotels-auction-foreclosure/ By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group PUBLISHED: April 26, 2021 at 5:45 a.m. | UPDATED: April 27, 2021 at 6:46 a.m. SUNNYVALE — Two Silicon Valley hotels are headed for the auction block and foreclosure, fresh evidence that economic ailments unleashed by the coronavirus still sicken the hospitality industry. The lender that holds the mortgage on the hotels, one in Sunnyvale and one in Mountain View, has scheduled a public auction for the two properties, which would be a prelude to a loan foreclosure and seizure, according to property documents filed on April 20. The property owners of the Hotel Avante, 860 E. El Camino Real in Mountain View, and the Wild Palms Hotel, 910 E. Fremont Ave. in Sunnyvale, defaulted in October 2020 on a $37 million loan that was provided by Cantor Commercial Real Estate Lending in 2014, Santa Clara County documents show. “This is a sign that lenders are losing patience and taking a more proactive approach with their borrowers, especially the ones that are severely delinquent,” said Alan Reay, president of Atlas Hospitality Group, which tracks the lodging sector. The total amount owed on the loan as of…
Gov. Newsom’s Economic Reopening Announcement Isn’t The Defining Moment CRE Needs
https://www.bisnow.com/san-francisco/news/commercial-real-estate/california-june-reopening-might-mean-choppy-waters-ahead-108468 April 9, 2021 Bianca Barragán and Jacob Bourne After having the physical and social scope of their lives drastically diminished for over a year, Gov. Gavin Newsom’s announcement that the state may undergo a full economic reopening on June 15 could signal to Californians that it is time to celebrate. For commercial real estate, that could manifest in people flocking to restaurants and shops, staying in hotels, signing office leases and kicking off tenant improvement projects. But dreams of smooth summertime sailing could be tempered by some real-life rough patches. Before the pivotal date arrives, state and local officials will have to determine that there is enough vaccine supply to meet the demand of those eligible within two weeks of an appointment being scheduled. Plus, hospitalization rates need to remain low. Meeting both of those criteria could be derailed by a wave of coronavirus mutations currently spreading through the Northeast and Midwest, leading to calls for additional vaccine supply, as reported by The Washington Post. Yet, even if California passes the reopening test, the subsequent parties being planned by JLL Executive Managing Director Chris Roeder’s younger colleagues will definitely be masked, he said, adding that the hospitality and restaurant industries should bounce back quickly. However,…
Wave Of Distress Missing LA Hotels To The Delight Of Value-Add And Redevelopment Projects
https://www.bisnow.com/los-angeles/news/hotel/los-angeles-hotels-pandemic-rebound-108471 April 9, 2021 Bianca Barragán, Bisnow Southern California The team marketing the Mart South hotel redevelopment in Downtown LA’s Fashion District noticed earlier this year that there was a big increase in interest in the property, a former office building entitled for hotel conversion. In fall 2020, the property was averaging about three inquiries a month, but in January and February, when a buyer was selected, that shot up to 20 inquiries a month. It surprised Cushman & Wakefield Executive Managing Director Mike Condon Jr. and Associate Bailey Dawson, who are leading the property sale, but Dawson said it seems indicative of the larger trend they’re seeing in LA. “There’s really been no massive wave of distress that’s enabling people that are trying to prey on the downturn,” Dawson said. “We just haven’t seen that.” The Los Angeles hospitality sector was, like others across the country, deeply impacted by the coronavirus pandemic. However, a potential summer reopening is about two months away, and leisure travel across the state appears to be making a noticeable return. The absence of mass foreclosures in LA that many braced for has some in the industry wondering if the worst is behind LA. That isn’t to say that hotels haven’t struggled….
Will California hotels get back to normal? This expert says yes
https://www.ocregister.com/2021/03/29/will-california-hotels-get-back-to-normal-this-expert-says-yes/ “The amount of interest that we’re now receiving from buyers is incredible. In some respects, it’s as if COVID never happened,” says Alan Reay. By SANDRA BARRERA | sbarrera@scng.com | Los Angeles Daily News PUBLISHED: March 29, 2021 at 8:00 a.m. | UPDATED: March 29, 2021 at 8:01 a.m. Like so many people, Alan Reay can’t wait to check-in, again. Reay is president and founder of Atlas Hospitality Group, an Irvine-based broker of California hotel sales. In the year since the COVID-19 outbreak, his travel plans were upended, with trips and conferences canceled or put on hold. After several decades as a top-producing hotel broker, the Brit who calls Newport Beach home founded Atlas Hospitality Group in 1996. The company also consults and compiles data of California hotel sales (which were slightly up by .3% last year from 2019; more than any other state) and new hotel construction. “I think the last business trip that I did was to San Francisco, and that was back in September of last year,” Reay said. “We’re tentatively scheduled to go to Maui in May, and hopefully that’s still on.” Business or pleasure? “Maui is for pleasure,” he said by phone. “Although when you’re in the hotel business, you’re always looking at…
Real estate: Upscale Menlo Park hotel is seized through foreclosure
https://www.mercurynews.com/2021/04/02/real-estate-upscale-menlo-park-hotel-seized-foreclosure-covid/ Boutique Menlo Park hotel in default on mortgage is auctioned off By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group PUBLISHED: April 2, 2021 at 5:45 a.m. | UPDATED: April 2, 2021 at 4:23 p.m. MENLO PARK — An upscale Menlo Park hotel whose owners had defaulted on a property loan has been seized through foreclosure of its loan, a grim new entry in the catalog of lodging industry woes during the coronavirus era. Park James Hotel, located at 1400 El Camino Real near downtown Menlo Park, is now owned by an affiliate of a Midwest firm whose specialties include the purchase of delinquent property loans, according to documents filed on Feb. 4 with San Mateo County officials. The hotel’s owners had become delinquent on a loan issued in 2019 by Employees Retirement Plan of Consolidated Electrical Distributors Inc., county public records show. The financing for the hotel totaled $32 million, according to county property documents. The loan went into default in September 2020 — less than a year when the financing was provided in December 2019, an unusually short period of time for commercial property financing to become delinquent. PJ Hotel, an affiliate of Illinois-based Bixby Bridge Capital, now owns the hotel, the county…
Sac, West Sac paid millions over appraised values for two motels under Homekey program
https://www.bizjournals.com/sacramento/news/2021/04/01/homekey-appraised-values.html By Renata Geraldo – Data Reporter Sacramento Business Journal Apr 1, 2021, 3:14pm EDT The cities of Sacramento and West Sacramento paid a total of almost $5 million above appraised market values for two motels they acquired under the Homekey program, a $600 million statewide project to purchase motels and convert them into housing for unhoused people. The Rodeway Inn in West Sacramento, which an appraiser valued at $3.38 million, was acquired by that city for $6.75 million from a limited partnership last November, documents obtained by the Business Journal show. Meanwhile, Sacramento’s La Mancha, previously called the WoodSprings Suites, was appraised at $12.6 million and acquired by the city for $14 million last September from WoodSprings’ parent company Madison Avenue P&L Enterprises Inc., according to the documents. The state’s Homekey program generally provided grants to cities, matching the market value of the motels they purchased. Sacramento and West Sacramento used public funds approved by their city councils to purchase the motels. Four other motels in the Sacramento area were purchased for the same prices as their appraisals. Local officials say there was an important factor that led them to pay above appraised values for the two properties — time. They…
