Atlas in the news

Orange County Business Journal 02/08/18 Hotel Sales Stable on No ‘Big Deal’ By Paul Hughes http://www.ocbj.com/news/2018/feb/08/hotel-sales-stable-no-big-deal/   OC hotels sold at a slightly lower rate for a markedly lower dollar volume last year—but results were affected by the lack of a trophy property sale in 2017, a survey by broker-consultant Atlas Hospitality Group in Irvine shows. Twenty-two local hotels sold last year for $485 million, down from 23 and $807 million in 2016, for a transaction decline of 4.6% and a volume drop of 40%. Average price and price-per room also declined. A big sale in 2016—the 396-room Ritz-Carlton, Laguna Niguel in Dana Point went for $366 million—accounts for the entire decline on the deal side and more than the $322 million on the dollar side. The Montage in Laguna Beach sold in the same deal as the Ritz when Blackstone Group LP moved more than a dozen properties to Anbang, a China-based insurer, for more than $6 billion. The two resorts skewed annual totals in 2015 as well when owner Strategic Hotels & Resorts sold both—acquired separately and nine years apart—to Blackstone. By contrast, last year’s priciest deal was $125 million paid for the 440-room Fairmont Hotel in Newport…

Orange County Business Journal 02/07/18 Debt Servicer Buys Second Disney-Area Hotel By Paul Hughes http://www.ocbj.com/news/2018/feb/07/debt-servicer-buys-second-disney-area-hotel   An affiliate of CW Capital Asset Management LLC bought the Portofino Inn & Suites for $26 million, its second such deal in the last few years for the bad debt of a Disneyland Resort-area hotel. The Portofino is a $99-a-room hotel at Harbor Boulevard and Katella Avenue—walking distance from Disneyland and the Anaheim Convention Center. CW Capital bought the $36.1 million loan on the 190-room hotel last month. The $26 million price works out to $136,000 per room. In July 2013 it paid $36.2 million for the $65 million debt on the 490-room Sheraton Park Hotel, which works out to $74,000 a room. Sheraton is a convention center campus property previously owned by Northwest Hospitality Group, appraised for $56.4 million in 2016, and a two-minute walk from Portofino. Rooms start at about $200. CW Capital is a Maryland-based special servicer of debt. Its website says it’s “actively servicing” $7.6 billion on 380 loans, has “resolved” $55.9 billion in loans since 2007, and has $99 billion in CMBS loans under management. Portofino was part of one such commercial mortgage-backed securities deal; owner SDRP I LLC…

Bisnow 02/05/18 Portofino Hotel Near Disneyland and Convention Center Sells for $26M By Joseph Pimentel https://www.bisnow.com/orange-county/news/hotel/portofino-hotel-near-disneyland-and-convention-center-sold-in-anaheim-for-26m-84563   The owner of a 190-room hotel near Disneyland defaulted on its loan and later sold to CW Capital Asset Management, a Maryland-based limited liability company, for $26M. Built in 1978, the Portofino Inn & Suites hotel at 1831 South Harbor Blvd. sits in the middle of Anaheim’s resort district, just one block away from the Disneyland Resort and the Anaheim Convention Center. SDRP I LLC owned the property’s ground lease and structures on the land. SDRP I LLC defaulted on a $36.33M bank loan, according to CoStar. When the company could not pay the unpaid balance on the principal in May, a trustee sale was conducted rather than a bank foreclosure, CoStar reports. SDRP I LLC officials could not be reached for comment. Irvine-based Atlas Hospitality Group President Alan Reay said the sale is not a reflection of the hospitality market in the area being depressed. It was a reflection of the debt structure, he said. Reay said the ground lease was on a commercial mortgage-backed securities loan that matured in 2017. The lender had tried to sell the loan and the owner…

Hotel Management 02/02/18 China’s Greenland Puts Downtown LA Indigo on the Market by Jena Tesse Fox https://www.hotelmanagement.net/transactions/china-s-greenland-puts-downtown-la-indigo-market That didn’t take long. Less than a year after opening in Los Angeles’ downtown neighborhood—and signaling a shift for the area—the Hotel Indigo is on the market. Developer Greenland USA, a subsidiary of the Shanghai-based property development firm Greenland Group, is reportedly asking $280 million for the 350-guestroom property for an average price of $800,000 per key. Reports suggest the hotel’s construction at around $600,000 per room or more. If the target price is reached, the deal would set a new record price on a per-room basis for a downtown Los Angeles hotel. China’s Crackdown This deal would be only the latest to stem from China’s crackdown on outbound investment in overseas real estate. Companies such as Anbang Insurance Group, Dalian Wanda, Fosun International and HNA Group have all made large, debt-fueled investments in the U.S. hotel sector. According to JLL, with $9.8 billion spent, investors from mainland China were the largest source of outbound capital into hotels in 2016. Across all investment classes, Chinese foreign direct investment in the U.S. totaled $45.6 billion in 2016. In August, China formally implemented measures to…

The Real Deal 01/30/18 Thousands of New Hotel Rooms Expected to Open in LA County Won’t: Report Atlas Hospitality estimates 10,000 of the 33,000 rooms planned will actually get built https://therealdeal.com/la/2018/01/30/thousands-of-new-hotel-rooms-expected-to-open-in-la-county-wont-report/   Around 10,000 hotel rooms are expected to come online in Los Angeles County over the next few years, according to a new report, part of what is projected to be a record-setting period of development across the state. That flood of new hotel construction still represents a conservative estimate of the total number of rooms that developers are proposing. In 2017, developers laid out plans to open 33,500 hotel rooms over the next few years in Los Angeles alone. The report from Atlas Hospitality Group estimates that, given historical data, the number will be closer to the 10,000 mark, Atlas President Alan Reay told the Los Angeles Business Journal. Still, that is a extraordinary pace of building. This year is expected to beat out any previous year on record, including 2017’s historic high for hotel rooms. Nearly 10,800 hotel rooms opened across the state last year, or 500 more than the previous record set in 2008. LA County led with 4,300 new hotel rooms, thanks in part to…

Orange County Business Journal 01/29/18 Little Change in Meeting Space Last Year, Lots in Focus Events Digs Make Splash as SF Up 2.1% By Paul Hughes https://www.ocbj.com/news/2018/jan/29/little-change-meeting-space-last-year-lots-focus/   Meeting space is what the community of business is, at least for the 52 hotels on this week’s list. The properties combine for 1.34 million square feet of it, an average of 26,000 apiece, from 140,000 square feet at top-ranked Hilton Anaheim to 6,263 square feet at No. 52, The Ranch at Laguna Beach. The minimum for inclusion this year was 6,000 square feet. Ranked hotels’ increased meeting space square footage by over 26,000 last year, or 2.1%. Orange County added six hotels with 960 rooms, according to Atlas Hospitality Group in Irvine, but most were smaller, select-service or extended-stay properties of fewer than 200 rooms, such as the unranked Hyatt House Irvine, at 149, and AC Hotel Irvine, with 176. Those types of sites have smaller event areas, and travelers here for short-term projects go elsewhere. Notable Steps It’s rare to see big changes in meeting space. • Even a second tower at No. 21, The Waterfront Beach Resort—the opening didn’t make our December deadline but is imminent—would’ve added “only” about…

Orange County Business Journal 01/29/18 Surge in Hotel Renovations Hits Meetings, Events From New Towers to New Tastes, Hotels Spruce Up By Paul Hughes https://www.ocbj.com/news/2018/jan/29/surge-hotel-renovations-hits-meetings-events/   Renovation has come to the fore among local hotels as construction slowed last year and several prominent redo projects concluded or are scheduled to debut. Atlas Hospitality Group in Irvine said new projects added 960 rooms at six hotels in 2017 but that renovations finished at 13 hotels with about 3,600 rooms. Renovation work spans the county, from Disney’s Grand Californian Hotel & Spa in Anaheim—which at more than 1,000 rooms beats new-builds by itself—to DoubleTree by Hilton Doheny Beach Hotel in Dana Point. The new room count was down 47% from 2016, though the market is poised to regain part of the equivalent of last year’s loss this year—the Lido House by Bob Olson’s development and construction companies will open in Newport Beach in March, for instance—but renovations still dwarf new construction. If all eight hotels under construction opened this year, they would bring 1,657 rooms to the market. Of course, that’s not happening—the 600-plus-room Westin Anaheim Resort, for one, only broke ground in September. Meanwhile, Atlas data show 10 hotels under renovation…

Los Angeles Business Journal 01/26/18 Hotel Report: 10,000 New Rooms Likely Soon By Caroline Anderson http://labusinessjournal.com/news/2018/jan/26/hotel-report-10000-new-rooms-likely-soon   Los Angeles is a hot spot in the strongest market for hotel development in the past 30 years – but that doesn’t mean everything on the drawing board will come to fruition. That’s a caveat that Atlas Hospitality Group added to its recently released California Hotel Development Survey for 2017. The report tallied 4,300-plus new hotel rooms in Los Angeles County last year, tops in the state. L.A. also finished 2017 with the 33,500 hotel rooms on the drawing board – the most in the state and more than double San Diego County, the next closest market. It’s likely that about one-third of the proposed rooms – 10,000 or so – will be built over the course of several years, according to Atlas Hospitality President Alan Reay. Reay’s estimate is a projection based on historical data over the last 20 years. Interest from overseas investors, low interest rates, availability of financing and the strength of the California economy have helped drive the hotel building boom, Reay said. Downtown appears poised to get a large chunk of any hotel rooms developed in the next…

HotelNewsNow 01/25/18 California Exceeds Supply Expectations with Record 2017 California set a record in 2017 for the number of hotel rooms opened, which sources believe illustrates the state’s ability to absorb new supply. California is on track to see another record year of development in 2018, but some are wondering how much more supply the state can take in without hurting performance. By Bryan Wroten http://www.hotelnewsnow.com/Articles/269626/California-exceeds-supply-expectations-with-record-2017   REPORT FROM CALIFORNIA—All signs pointed to 2017 being a good year for hotel development in California. As it turns out, it was so good that the state saw the highest number of openings of new guestrooms ever. “We haven’t seen hotel development in California like this since 2008,” said Alan Reay, president of the Atlas Hospitality Group, author of 2017 California Hotel Development Survey. “It was a very strong year for construction companies, developers, construction lenders, all of that.” Atlas had predicted a strong 2017 for California hotel development, he said, but no one there expected the number of new room openings to hit 10,793 in 66 hotels, surpassing 2008’s record of 10,286 new rooms. There were several contributing factors, Reay said, including a strong California economy, record revenue growth for the state’s…

CoStar 01/23/18 Anaheim Hotel Sold by Trustee for $26M Portofino’s Former Owner Defaulted on $36M Loan By Lou Hirsh https://gateway.costar.com/home/news/shared/186846   The 190-room Portofino Inn & Suites hotel in Anaheim, CA has been sold by a trustee for $26 million, after its prior owner defaulted on a $36 million loan on the property located at 1831 S. Harbor Blvd. The hotel remains open for business. Title documents indicate that the property’s ground lease and structures were acquired in a December trustee sale by a limited liability company in Maryland affiliated with CW Capital Asset Management LLC. Bethesda-based CW Capital is a special-services and asset management firm focused on transactions related to financially distressed properties. The hotel was originally built in 1978 and is located about a half-mile from Disneyland. The property’s ground lease and structures on the land had been owned previously by SDRP I LLC, a Delaware limited liability company, via a loan taken out in 2007 Documents indicate that SDRP, as of July 26, 2017, owed $36.33 million on a bank loan with an original balance of $36.75 million. The unpaid balance on the principal came due on May 11, 2017, and the trustee sale took place in…

Los Angeles Business Journal 01/19/18 L.A. County’s New Hotel Rooms Lead State By Caroline Anderson http://labusinessjournal.com/news/2018/jan/19/l-countys-new-hotel-rooms-lead-state/ Los Angeles played a leading role as California saw a record number of new hotels open their doors last year, according to a report released this month by Irvine-based hotel brokerage Atlas Hospitality. The number of new hotel rooms that opened in Los Angeles County increased 300 percent last year to about 4,300 rooms from about 1,100 in 2016, Atlas reported. The increase came as 23 hotels debuted over the year, including the Intercontinental Los Angeles Downtown, the Waldorf Astoria Beverly Hills and the Hotel Indigo Downtown Los Angeles. The Intercontinental Los Angeles Downtown was the single largest hotel to open in the state with 889 rooms. L.A. County looks set for another robust round of additions with more than 5,300 rooms under construction as 2017 ended, according to Atlas. The county also has more hotel rooms planned – on the drawing board but not yet under construction – than any other county in the state. There are nearly 34,000 rooms currently planned here, up 20 percent from the prior year, according to Atlas. There are about 80,000 rooms planned statewide. The next closest…

The San Diego Union-Tribune 01/22/18 San Diego in Midst of Hotel Building Boom By Lori Weisberg http://www.sandiegouniontribune.com/business/tourism/sd-fi-hotel-building-20180122-story.html   In the span of a year, the number of hotel rooms under construction in San Diego County doubled, outpacing all other counties in Southern California. New year-end figures released by Orange County-based Atlas Hospitality Group document a continued building boom up and down the state, with a record 10,793 hotel rooms that opened in California in 2017 and 125,749 more still in the planning stage. What is less clear is how many of those hotel projects will move forward and whether the pace of development can be sustained well into the future. Atlas CEO Alan Reay, who admits to being a little surprised by the robust pace of growth, remains bullish on development into this year and next. “I would have anticipated a little more caution, both from developers and banks but the opposite has happened,” he said. “It’s amazing to see the amount of development going on. It seems a day doesn’t go by where you don’t hear about the impact of Airbnb and yet the demand for hotels is still very strong.” In San Diego County, there are 2,823 rooms…