Atlas in the news

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…

By Alex Barreira – Staff Reporter, San Francisco Business Times Nov 20, 2024 | Updated Nov 20, 2024 7:15am PST As the contract impasse between San Francisco hotel workers union Unite Here Local 2 and operators Hilton, Hyatt and Marriott nears its 100th day, the union is turning its appeals to a surprising place: Wells Fargo. The big bank is the master servicer of the $725 million loan guaranteed by the city’s largest hotel complex, the Hilton San Francisco Union Square and Parc 55. As such, it’s obligated to defend the interest of bondholders. So the union has tried to recruit Wells Fargo and the Hilton bondholders to its side and pressure the operators to come to terms. Unite Here said it hopes that with enough pressure, Wells Fargo will put in a word with Hilton to give in to the union’s demands on health care, shift allotment and wages in the next collective bargaining agreement. The union has agreed to contracts with individual Hiltons in Boston, Honolulu, San Diego, San Jose and Baltimore, but not in San Francisco. In the meantime, Unite Here is doing what it can to make Hilton and the bondholders feel that time without a…

By Alex Barreira – Staff Reporter, San Francisco Business Times Nov 18, 2024 San Francisco’s largest hotel complex is inching closer to a buyer. Eastdil Secured, acting as broker, submitted its first and final calls for bids on the Hilton San Francisco Union Square and Parc 55 hotels and “several offers are presently under review,” according to a bondholder report this month on the properties’ associated debt. The connected and jointly managed hotels, with nearly 3,000 rooms combined, have been under court-appointed receivership for just over a year since former owner Park Hotels & Resorts handed in the keys rather than pay off its related $725 million loan. The receiver, Michelle Russo of Hotel Asset Value Enhancement, has a deadline to contract a buyer by March 31, 2025. Since Eastdil’s offering memorandum went out in July, the broker has collected at least 70 confidentiality agreements related to buyer discussions with “many large national and international names,” per the bondholder report. In September Eastdil began conducting tours and was participating in daily buyer phone calls. Per the report, the hotels are being offered to buyers with or without the existing debt in order to maximize the potential return for bondholders. The…

By Nellie Day  Nov 12, 2024 8:00am Los Angeles has always been synonymous with fame, thanks to Hollywood and its entertainment production powerhouses. In addition to awards shows – think Grammys, Emmys, Oscars, etc. – Los Angeles pulls travelers thanks to its weather, many area attractions and convention business. Some hotel investors are optimistic that a new wave of high-profile events will continue to diversify LA’s offerings and buoy the market’s post-pandemic recovery. That’s because this upcoming glut of events is centered around sports. “Los Angeles certainly has some very high-profile events that will contribute to a hotel’s profitability,” says Robert Feist, vice president of Atlas Hospitality Group. “The upcoming events, such as the World Cup and the Olympics, are great events for the city.” High-profile breeds high-profile The region will take center stage among the sports world over the next few years as it hosts the FIFA World Cup and NBA All-Star Game in 2026, Super Bowl LXI in 2027 and the Summer Olympic games in 2028. In addition to these high-profile events, the LA region hosts regular games from its National Football League (NFL’s Chargers and Rams), National Basketball League (NBA’s Lakers and Clippers), Major League Baseball (MLB’s Dodgers and Angels,…

Discussions are in final stages to land new funding but bumpy road looms By George Avalos | gavalos@bayareanewsgroup.com | Bay Area News Group UPDATED: October 20, 2024 at 7:36 a.m. SAN JOSE — The owner of a big San Jose hotel has crafted a plan to land a crucial round of financing for the lodging tower — even as the current lender threatens to foreclose on a delinquent loan for the iconic property. The financing maneuvers involve the highrise Signia by Hilton San Jose, a 541-room hotel at 170 South Market Street in downtown San Jose. Sam Hirbod, principal owner of the hotel property in the city’s trendy and hip SoFA district, has been working for months to cobble together permanent funding on attractive terms for the hotel. The current lender, BrightSpire Capital, has provided the hotel with a financing package that as of July 2024 totaled about $165.3 million. In a move that could trigger a foreclosure of the hotel’s loan, BrightSpire has filed a notice of default and has scheduled an auction on the property. Hirbod in recent days thought he had secured a new financing deal. Hirbod added that the terms were so onerous that both his ownership group and Hilton decided…