Atlas in the news

January 14, 2025 The year 2024 was a transformative one for California’s hotel industry, defined by a mix of contraction and resilience, according to the latest California Hotel Development Survey by Atlas Hospitality Group. While the number of new hotel openings declined sharply, several regions demonstrated their long-term commitment to hospitality growth, with major projects under construction and a robust planning pipeline. The state completed 35 new hotels, adding 3,798 rooms to its inventory. This marked a significant 34 percent decrease from the 53 hotels and 6,280 rooms that opened in 2023. The decrease reflects a challenging economic climate characterized by escalating construction costs, high interest rates, and tightened lending practices. Collectively, these factors weighed heavily on new hotel developments, forcing investors and developers to reassess their strategies. Southern California: A Tale of Leaders and Laggards Southern California remained a focal point for hotel development in 2024, with notable activity in key counties. Los Angeles County solidified its position as the leader in the state, opening five new hotels totaling 607 rooms. However, this was a stark 56 percent drop in new room count compared to the previous year. The largest opening was the 150-room Cambria Suites in Burbank, while…

Openings dropped 34% in 2024, with only three new hotels in nine-county Bay Area. By Jack Rogers| January 17, 2025 at 07:08 AM Hotel development has plunged across California for 2024, with the lowest total of new hotels and rooms delivered to The Golden State since 2014. Only 35 new hotels were delivered last year, a drop of 34% from the 2023 total of 53. These openings added a paltry 3,798 hotel rooms to the lodging inventory in the state, down nearly 40% from the previous year’s total of 6,280. The new annual survey from Atlas Hospitality Group also reported a shrinking hotel development pipeline in California, with a decline in the number of hotels under construction or being planned. Rising costs, high interest rates and lenders pulling away from new hotel construction all contributed to the decline in new development. Atlas noted an increase in the number of hotel projects that started then followed by stopping construction — have since defaulted on their loans. “We predict that in the near term the future for hotel construction will remain weak as investors focus on purchasing existing hotels at discounts to replacement costs,” Alan Reay, Atlas Hospitality president, said in the report….

Atlas Hospitality survey reports 35 new hotels in 2024 By Bryan Wroten | Hotel News Now | January 15, 2025 | 6:23 AM California hotel development reached its lowest point in about 10 years in 2024. Atlas Hospitality Group’s California Hotel Development Survey 2024 Year-End found 35 hotels opened last year, a 34% year-over-year drop in hotel openings, with 3,798 rooms. The largest hotel to open was the 197-room Chicken Ranch Casino Resort in Jamestown, followed by a tie at second place with the AC Hotel Sacramento and SpringHill Suites Chula Vista Eastlake, both with 179 rooms. The last time the number of California hotels and rooms opened was lower was in 2014, when 26 hotels opened with 3,191 rooms. The years leading up to 2014 were lower as well due to recovery from the Great Recession. In recent years, hotel openings peaked in 2019 with 92 hotels, bringing in 11,795 rooms. Rooms openings hit their high in 2021 with 12,027 rooms in 88 hotels, but that was due in part to hotel openings that were delayed from 2020 because of the pandemic. Interest rates are high, lenders have pulled back and investors can buy an existing hotel below replacement cost, Atlas Hospitality President Alan Reay said. “That’s…

Inflation and interest rates hobble hotel projects By George Avalos | gavalos@bayareanewsgroup.com | Bay Area News Group UPDATED: January 15, 2025 at 4:18 AM PST SAN JOSE — Hotel development nosedived in California and the Bay Area in 2024, fresh evidence the statewide lodging market may still be affected by economic conditions following a global pandemic, a new report shows. Atlas Hospitality Group disclosed in a new report that the decline involved three types of hotel projects: those being planned, those under construction, and new openings. Here are some of the details of the report from Atlas Hospitality Group: — In 2024, developers completed and opened just three hotels in the Bay Area, a plunge of 75% from the 12 hotels that opened in 2023. — The hotels that opened in 2024 in the Bay Area had a combined total of 348 rooms. That was down 78.4% from the 1,615 hotel rooms that were opened in the nine-county region in 2023. — Northern California, which includes the Bay Area, added 18 new hotels with 1,849 hotel rooms in 2024. The number of Northern California hotels that came on line in 2024 was down 28% from the 25 hotels that opened in the region in 2023. The total for…

Hotel faces foreclosure due to delinquent loan By George Avalos | gavalos@bayareanewsgroup.com | Bay Area News Group UPDATED: January 8, 2025 at 10:42 AM PST CUPERTINO — A South Bay hotel with a trendy design and a prime location near a famed Apple office hub has lurched into a loan default, a grim reminder of the weakness in the Bay Area’s feeble lodging sector. Aloft Cupertino faces foreclosure due to a delinquent loan that finances the property, according to documents filed on Jan. 6 with the Santa Clara County Recorder’s Office. The 123-room hotel is located at 10165 North De Anza Blvd. in a prime Cupertino location near several Apple tech hubs. Aloft Cupertino is just a few blocks from Apple’s Infinite Loop campus. For decades, that complex served as the company’s headquarters before the tech titan established its head offices at the Apple Park spaceship complex. The loan delinquency that looms over the Aloft Hotel is a fresh sign that economic maladies still afflict the Bay Area lodging and travel sectors even after the end of coronavirus-linked business shutdowns to combat the spread of the deadly bug. “A lot of the hotels, such as Aloft Cupertino, that are focusing on commercial markets and business…

Utah investment firm acquires two Anaheim properties for more than $200 million By Lou Hirsh | CoStar News | December 24, 2024 | 12:14 P.M. An investor has snapped up two Anaheim hotels in California’s largest hospitality sales deal of 2024, the latest sign of a potential nationwide rebound in such transactions in the coming year. Public document filings showed investment firm Dynamic City Capital of Provo, Utah, paid approximately $207.3 million for the 294-room Residence Inn, built in 2016 at 640 W. Katella Ave.; and the 174-room SpringHill Suites, built in 2014 at 1801 S. Harbor Blvd. The seller was T2 Hospitality of Newport Beach, California. The buyer and seller did not immediately respond to requests from CoStar News to comment. Home to Disneyland, Anaheim is historically among the nation’s most active regions for tourism and hotel demand. The transaction price was the largest for Orange County hotel deals in 2024, and by far the largest in California, according to Alan Reay, president of hotel brokerage and research firm Atlas Hospitality Group in Newport Beach. The deal price beat out other 2024 California hotel transactions including the $165 million sale of the Hilton Torrey Pines in San Diego, which closed in July, and the $80 million…

Sheraton San Diego Hotel & Marina Finishes $100M+ Reno REAL ESTATE: Upgraded Rooms, Pool Area, Meeting Space, Lobby, New Restaurants By  Donald Bloodworth  – December 19, 2024 SAN DIEGO – More than $100 million went into updating the Sheraton San Diego Hotel & Marina in a newly finished renovation billed as a transformation that “redefines the property.” “This is the most significant and comprehensive renovation in the history of the property, encompassing not only new coastal guest rooms, but also meeting space, significant lobby updates, new food and beverage outlets, as well as updates to the pool areas and outdoor spaces,” said General Manager Sean Clancy. “Our goal with the redesign was to focus on the hotel’s public spaces and reimagine the Sheraton as the future of the world’s gathering space, drawing on its roots as a community hub for locals and guests,” Clancy said. Opened at 1380 Harbor Island in 1972 by ITT Sheraton, the 717 guest rooms and suites in the Marina Tower got a new look and color palette that draws from the colors of the marina in a design by ForrestPerkins, a design and architect firm based in Dallas. “The Marina Tower guest rooms’ design exudes…

Lowered projections for cuts in 2025 a cause for concern By Bryan WrotenHotel News NowDecember 19, 2024 | 7:16 AM The Federal Reserve’s decision to cut the federal funds rate a further 25 basis points will lower the cost of capital. But even when combined with the two previous cuts from this year, hotel industry experts don’t expect much relief. “A lot of people were expecting interest rates to come down, which they are, but these are not trends being translated into the rates that you have to pay for hotel financing,” said Alan Reay, president of hotel brokerage firm Atlas Hospitality Group The Federal Open Market Committee voted to reduce the federal funds rate to a range of 4.25% to 4.5%, down a full 100 basis points from its post-pandemic peak. Its first cut in this run arrived in September, dropping the rate 50 basis points to a range of 4.75% to 5%. A 25-basis-point cut followed in October. The FOMC also indicated two likely cuts in 2025 should conditions call for it.That’s down from four cuts in 2025 projected by the FOMC in September. Hotel industry perspectiveThe cutting of the federal funds rate affects the prime rate, which…

December 3, 2024 Bianca Barragán, Southern California  Los Angeles is gearing up to host the Olympic and Paralympic Games, a Super Bowl and World Cup games in the next decade, but its hotel landscape is facing challenges from every angle. There are 105 hotel projects in the Greater Los Angeles area in the development process, Majestic Hospitality Group CEO Christopher Henry said, citing data from Lodging Econometrics. Between now and the 2028 Olympics, about 22 of those 105 projects, or 2,600 rooms, are expected to open, Henry said during Bisnow’s Los Angeles Hospitality and Retail Summit, held Nov. 19 at the Beverly Center. Los Angeles County’s development landscape for hotels has been heavily impacted by increased construction costs and challenges securing financing, according to an Atlas Hospitality Group report published midyear.  Sun Hill Properties CEO and President Mark Davis told the audience that his company has been working on securing approvals for a 400-room hotel expansion project near Universal Studios for almost nine years.  “We’re just a few months away from entitlement,” Davis said. “Construction costs have gone up about 40% since we started. We were hoping to be building when interest was 3%, now it’s 7 or 8%, so it’s tough to pencil in LA these days.”  Although the pipeline faces…

Plunging values, and safety concerns are hitting lodgings in the airport corridor. By Jack Rogers| November 22, 2024 at 05:38 AM Hotel values are cratering in Oakland, with the latest benchmark set by a downtown property that sold for 76% less than its last trade. Core Property Capital paid $10.6M for the Courtyard Oakland Downtown, a 162-room Marriott-branded hotel located at 988 Broadway. The five-story hotel, which includes 1,300 SF square feet of ground floor retail and 2,700 square feet of meeting space, was sold by Gaw Capital Partners, which acquired the property in 2016 for $43.8M, SiliconValley.com reported. The downtown Courtyard’s estimated value in January, according to an Alameda County assessment, was $44.6M. Last month, the 289-key Radisson Oakland Airport hotel’s valuation dropped to $15M, which is about half of a $28M CMBS loan backed by the property, according to a Morningstar report. The new valuation represents a 70% drop from a 2018 assessment of $75M. At the end of August, the 360-room Hilton Oakland Airport permanently closed after 56 years at One Hegenberger Road. In June, Park Hotels & Resorts, which operated the Hilton, notified the Port of Oakland that it would be closing. Hilton has leased the 20-acre site for…