Atlas in the news

Los Angeles Times 09/24/17 Is Disney Paying Its Share in Anaheim? The money battle outside the Happiest Place on Earth By Daniel Miller http://www.latimes.com/projects/la-fi-disney-anaheim-deals   A few hours after the gates swing open at Disneyland and Disney California Adventure, the cars are still pouring into the massive 10,241-space parking garage. They zoom into the six-story concrete structure, carloads of costumed kids, foreign tourists and graying baby boomers sporting Mickey Mouse ears, “Frozen” dresses and “Star Wars” backpacks… …Last year, Disney sought a tax rebate for a proposed hotel at its resort. Under a program started in 2015 to encourage the development of four-diamond properties, Anaheim offered hoteliers a 70% refund on the 15% bed tax collected from guests for 20 years. Without the incentive, Disney said it would not build the 700-room hotel, The Times reported last year. Still, Alan Reay, president of Atlas Hospitality Group, a real estate firm that specializes in hotels, says it would be hard for Disney “to argue that they wouldn’t build that hotel without subsidies,” given the company’s financial position and the strong economy. A city-commissioned study said that the new Disney hotel would create 5,050 construction jobs during the course of the project…

The Registry 08/30/17 Hospitality Market in California Retains Its Shine By Michele Chandler http://news.theregistrysf.com/hospitality-market-california-retains-shine   Hotel sales surged in California during the first half of the year, according to a recent industry report. A shortage of strong alternative investment opportunities and attractive terms are fueling a spike of first-time investors in California hotels, including investors from as far away as China, according to the Atlas Hospitality Group’s 2017 Mid-Year California Hotel Sales Survey. While the median sale price per room “has pulled back slightly from 2016,” the report said, “there is no let-up in buyer interest.” Statewide, the average cost per room went down nearly 3.5 percent, to $151,266, while the median price per room decreased 3.1 percent, to $103,586. “What we’re finding across the board is a lot more transactions, but a lot more of the lesser-priced transactions than what we saw for the first six months of 2016,” including fewer high-end, or “trophy,” hotel sales, said Atlas President Alan Reay. But California also saw a record 206 individual hotel transactions through the first six months of year, according to the report. The previous high of 187 transactions was set in 2014. The mid-year total dollar volume of $3.23…

Building Design + Construction 08/25/17 Hotels Savor Demand in Northern California’s Wine Country By John Caulfield https://www.bdcnetwork.com/hotels-savor-demand-northern-californias-wine-country The Wine Institute estimates that nearly 24 million people visit the 4,653 wineries in California’s wine regions each year. That tourism’s economic impact in the state, which last year totaled $57.6 billion, includes a robust hospitality and lodging market. While construction slowed a bit last year, there were 26 hotels with 2,204 rooms in the planning stages for northern California’s vineyard-rich Sonoma County, and 13 hotels with 1,621 rooms being planned for Napa Valley, according Atlas Hospitality Group’s 2016 California Hotel Development Survey. Earlier this month, construction began on one of those establishments, the $24 million, 122-key Hotel Trio in Healdsburg, Calif., which CU Investors, its developer, expects to open next April. The 82,638-sf hotel, situated in the Sonoma wine country, will serve the Dry Creek, Russian River, and Alexander Valley areas (hence, the “trio”). It will be within walking distance of a host of wineries and have convenient access to hundreds more within a 30-mile radius of the site. The hotel will include 13 one-bedrooms and 109 studios, and primarily will target individuals and couples who are staying over for a few…

Orange County Business Journal 08/17/17 Hotel Construction Mostly Small World for Meetings Properties Coming Soon for Smaller, Local Clients By Paul Hughes https://www.ocbj.com/news/2017/aug/14/hotel-construction-mostly-small-world-meetings   Local data show at least eight Orange County hotel projects are under way, several that are scheduled to open in the next six months, and most notable for something they’ll have in smaller amounts than just about any property in OC: meeting space. Most construction (see box below) is limited or “select service” hotels, smaller offerings by design, with fewer bellhops and whistles—complimentary breakfast and a couple of thousand square feet for events. Industrywide, “the vast majority of new hotels being built are in the smaller, limited service sector,” said Alan X. Reay, president of Irvine-based consultant and broker Atlas Hotels. Atlas produces a report reflecting current hotel construction. “The average size of these properties is 100 to 150 rooms, and you’re not going to build lots of meeting space,” he said. “You don’t have the capacity.” Reay said such hotels are easier for developers to finance and more profitable for owners to operate, producing profit margins of 35% to 50%, compared with 15% to 20% at full-service hotels with several hundred rooms and the full…

Bisnow 08/15/17 San Diego Hotel Transactions Up 70% in First Half of 2017 By Patricia Kirk https://www.bisnow.com/san-diego/news/hotel/san-diego-hotel-transactions-up-70-in-first-half-of-2017-77702   Hotel transactions in San Diego County increased in the first six months of 2017, up 70% from previous midyear sales. The total sales dollar value rose 54%, according to a midyear hotel sales report from Atlas Hospitality Group. The average price per room rose 2% compared to hotel transactions during the first half of 2016, but the median price per room dropped 6%. The sale of the Park Hyatt Aviara Resort Hotel in Carlsbad to lender CW Capital Asset Management was the largest and most expensive hotel transaction at $185.6M, the report noted. That transaction came after a years-long struggle by the previous owners to repay debt coming due, the San Diego Union-Tribune reports, which noted a grant deed in lieu of foreclosure transferred the property to the lender for the amount of unpaid debt. Broadreach Capital Partners paid $251M in 2007 for controlling interest in the 329-room hotel, which was formerly managed by Four Seasons. Overall, there were 206 hotel transactions in California through the first six months of 2017, a midyear record. The previous midyear high was in 2014, when…

The San Diego Union-Tribune 08/15/17 SoCal Hotel Sales Reach New Record By Lori Weisberg http://www.sandiegouniontribune.com/business/tourism/sd-fi-hote-sales-20170815-story.html In a surprise turnaround, Southern California hotels sales rose sharply during the first half of the year, reversing a downward trend for all of 2016, reported Irvine-based Atlas Hospitality Group. The mid-year report reveals a record number of transactions for the state as a whole — 206 — and a total dollar volume of $3.2 billion, the second highest on record, according to Atlas. In Southern California, there were a record 97 transactions, valued at $1.99 billion. That falls short of the previous high of $2.4 billion, set in mid-2015, although it is considerably higher than the $1.1 billion in sales for the first half of 2016, Atlas reported. “At the end of 2016 we definitely saw a slowdown and we had projected the number of sales would either be down or flat because we thought interest rates would be going up, and we had a new administration, and almost the complete opposite happened,” said Atlas president Alan Reay. “Sales have continued to climb, and interest rates are still at historic lows for hotel financing.” Los Angeles County recorded the priciest transaction in the state,…

The Real Deal 08/14/17 LA Hotels Are Trading at Double the Rate They Did Last Year: Report By Katherine Clarke https://therealdeal.com/la/2017/08/14/la-hotels-are-trading-at-double-the-rate-they-did-last-year-report   Los Angeles hotels are trading at twice the rate they did last year, thanks in part to the availability of financing and continued demand among buyers from China. In L.A. County, 26 hotels traded hands during the first six months of the year, the same number as traded during the whole of 2016, according to a report by Atlas Hospitality Group cited by the Los Angeles Business Journal. Those 26 deals accounted for $780 million in total dollar volume, a 46.1 percent increase from the same period last year. The average price was $238,000 per key, a 25.6 percent increase from last year. “I think a lot of smaller players who made it through the recession are now seeing prices being offered that have them thinking that now is a great time to get out,” Atlas president Alan Reay told the Journal. A $219 million deal for the W Hollywood hotel was the priciest deal of the year so far. The 305-key property sold in March to HEI Hotels & Resorts and Gatehouse Capital of Dallas.

The Orange County Register 08/11/17 Check Out the Top Orange County Hotel Sales of 2017 Through June By Hannah Madans http://www.ocregister.com/2017/08/11/check-out-the-top-orange-county-hotel-sales-of-2016-a-record-year-for-california-overall/   The hotel industry hit a record in California in the first six months of 2017, with 206 properties changing hands for roughly $3.2 billion, according to Atlas Hospitality Group. The previous state record was 187 hotels sold in six months in 2014. In Orange County, 16 hotels sold for $372 million, Atlas reported, a 200 percent increase compared with the same period in 2016. Statewide, the number of hotel transactions was up 43 percent, while the total dollar value increased 67 percent. In Southern California, transactions for the period were up 23 percent. “The profitability on hotels is still very strong,” Atlas president Alan Reay said Friday. “We’re seeing a lot of people getting into the hotel business because the returns are higher than on other commercial offerings. “Financing from banks is readily available at historically low-interest rates and we have a lot of interest from overseas, mainly from China, in this market,” he said. “They see it as a safe investment and they like the hotel business.” In Northern California, 109 hotels traded hands, an increase of…

The San Diego Union-Tribune 08/11/17 Lender Takes Possession of Park Hyatt Aviara By Lori Weisberg http://www.sandiegouniontribune.com/business/tourism/sd-fi-parkhyatt-aviara-20170811-story.html   Carlsbad’s luxury resort, Park Hyatt Aviara, has been taken over by its lender following a years-long struggle by its previous owners to repay debt that was coming due… …The 2011 loan extension expired in February of this year. “This is not a reflection that the hotel market was bad, it was a reflection that the owner paid too much and the debt was too high,” said Alan Reay, president of Orange County-based Atlas Hospitality Group. “The lender at one time had realized it was in their interest to cut the interest rate and work it out with the borrowers, but when the loan came due, the special servicer decided to not extend it any further and take the property back. And you have the borrower saying I’m not going to fight it.” The 200-acre resort was at the center of a very public feud in 2009 when Broadreach sought to oust the hotel’s longtime operator, Four Seasons Hotels and Resorts. Although Broadreach had tried to immediately remove Four Seasons, contending that it had failed to run the property in a “cost-effective manner,” the…

Forbes / Bisnow 08/10/17 California Leads the Nation for Q2 Hotel Sales Even as Sector Slows By Karen Jordan https://www.forbes.com/sites/bisnow/2017/08/11/california-leads-the-nation-for-q2-hotel-sales-even-as-sector-slows/#41fb90b35ba1   While the nation’s hotel deals have slowed in the first half of this year after several years of rising sales, some markets continue to do well. California was the nation’s most active market for hotel deals in Q2. California had 10 major hotel sales in Q2, according to a recent LW Hospitality Advisors Q2 2017 Major U.S. Hotel Sales Survey, which focused on major single asset transactions of $10M and above. Florida came in second with nine deals in the quarter. Particular cities stood out, including Atlanta with four deals and San Jose, which had three. LW Hospitality Advisors President and CEO Daniel Lesser said coastal cities, like those in California, have advantages in the current market. California had deals totaling around $2.8B in Q2, including about 11,600 hotel rooms with an average per room sale price of $244K, according to the survey. “California is a coastal location. Similar to East Coast locations like New York, coastal cities tend to be highly desirable for investors,” Lesser said. “California, generally speaking, it’s safe to say it’s probably harder to develop…

Orange County Business Journal 08/10/17 Hotel Sales Mid-Year Tally: $372M By Paul Hughes http://www.ocbj.com/news/2017/aug/09/hotel-sales-mid-year-sales-tally-372m   16 OC hotels sold for more $372 million in the first six months of the year—an average of $23.3 million and 201% higher by dollar volume than in the same period last year. The tally for the first half of 2016 was just $123.7 million on 14 deals—an average of $9.5 million per sale. Data is from a mid-year sales report by hotel broker and consultant Atlas Hospitality Group in Irvine. The 16 hotels sold comprise more than 1,800 rooms, compared with about 890 year-over-year, and the price-per-room rose about 15% to top $202,700, compared with $177,100 last year. The big increase in room count and dollar value on just two additional sales point to larger hotels being sold this year, headlined by more marquee deals. The largest and most expensive sale so far this year in OC was the $125 million paid in February for the 444-room Fairmont Newport Beach, a price-per-room of $282,000. Aliso Viejo-based hotel REIT Sunstone Hotel Investors Inc. sold the hotel, a few blocks from John Wayne Airport, to a China-based owner working through Infinity Realty Advisors in Los Angeles….

HotelNewsNow 07/31/17 California Remains Popular, Challenging for Development By Bryan Wroten http://www.hotelnewsnow.com/Articles/158190/California-remains-popular-challenging-for-development   REPORT FROM THE U.S.—Hotel development in California continues on at an increasing rate. Atlas Hospitality Group’s California Hotel Development Survey for mid-year 2017 shows the number of hotel openings jumped 53% year over year. So far this year, the California market has seen 15% more new hotels and 6% more rooms under construction compared to mid-year 2016. In the planning phase, the market reported 773 hotels (a 37% increase over 2016) with 113,973 rooms (a 35% increase). The average size of hotels opening is 130 to 140 rooms, said Alan Reay, president of Atlas, and a vast majority of them are branded under Marriott International, Hilton or Hyatt Hotels Corporation. They typically cost more than $100,000 a key, he said. San Francisco is an area with huge barriers to entry, he said, but the city recently changed zoning in a large section of the city that will allow light industrial, commercial and hospitality construction. “We might see in San Francisco what we have seen in downtown Los Angeles over the last 24 months,” Reay said. Downtown LA is one of a few areas that can handle higher…