Atlas in the news

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,…

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…

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…

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…

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…

22 Hotels Opened in State During First Half of Year By Bryan Wroten | Hotel News Now | July 29, 2024 | 5:49 AM 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…

The golf course-adjacent resort commanded a purchase that is among the highest in the Western U.S. in 2024. By LORI WEISBERG | The San Diego Union-Tribune UPDATED: July 24, 2024 at 4:07 p.m. In what is the single biggest hotel sale so far this year, the 394-room Hilton La Jolla Torrey Pines resort has been acquired for $165 million by a Los Angeles-based investment firm that owns no other hotels in San Diego. JRK Property Holdings, a real estate company that focuses largely on multi-family housing, was drawn to San Diego because of its stature as a lucrative hospitality market. But the real draw was the Hilton property, given its highly desirable location near the coast, said executive Shaan Bhatia. It also helped that JRK had $350 million in investor money still sitting in a separate hospitality fund waiting to be spent. “The Hilton was on the market, and we’d been hunting,” said Bhatia, who is head of hotel investment for JRK. “San Diego is in our view one of the major growth markets, and there’s a very strong life sciences corridor next to this hotel that makes this a very strong long-term bet to make. It’s also in a sub-market where there’s…

HOSPITALITY: Recent Hotel Renos Reflect ‘Strong Market’ BY RAY HUARD | JULY 15, 2024 SAN DIEGO – The Westin San Diego Bayview has completed a $20 million renovation that general manager Peter Engard said is meant to provide “an unparalleled experience” that reflects the hotel’s location in Emerald Plaza that lights up the San Diego skyline with its green outline. At 400 West Broadway in the Columbia District of downtown San Diego, “This iconic building is San Diego’s most distinctive building to shape the skyline,” Engard said. “It’s a beacon for visitors whenever they come to San Diego and it’s a great symbol of the downtown revitalization for us.” With the renovation of the hotel’s 436 guest rooms, designed by HVS Design, based in Maryland, Engard said that “everything about our guest rooms is reimagined” in the renovation. “We’re really eager to showcase our new product, really anticipate a very strong response from our guests now that the renovations are complete,” Engard said. Michelle West, director of design at HVS Design, said that the hotel’s new look starts “from the moment guests step off the elevator.” “They are greeted with delicate tones and a meandering carpet pattern that leads to…

By Kevin V. Nguyen Published Jul. 09, 2024 • 6:00am The historic Huntington Hotel at the top of Nob Hill celebrated its 100th birthday while its doors were shuttered in 2022. But unlike other major hotels in San Francisco, the 12-story, 135-room luxury property never managed to re-open under the previous owners once the pandemic ended.  Instead, they walked away from it with a $56.2 million loan still left to pay just as the Federal Reserve began raising interest rates. After being put up for auction by lenders eager to rid themselves of the property, a group led by local businessman and billionaire Greg Flynn purchased the debt for less than half that figure.  “Make no mistake, we are market timers,” Flynn told The Standard during a recent sit-down at his office on Bush Street, a 15-minute stroll down the hill from the Huntington. “San Francisco has always risen from the ashes. The best time to buy is when things look bleak.”  Having spent the better part of his life in San Francisco, where he would go on to build a sprawling global real estate empire of franchise restaurants, hotel chains and luxury resorts, Flynn said he was heartbroken to see the Huntington Hotel shut down. …