Atlas in the news

San Jose Mercury News 09/15/15 Larry Ellison Group Buys Hotel in Downtown Palo Alto By George Avalos http://www.mercurynews.com/business/ci_28811148/larry-ellison-group-buys-hotel-downtown-palo-alto A group controlled by software tycoon Larry Ellison has paid the equivalent of nearly $1 million per room for a boutique hotel in downtown Palo Alto. PA Hotel Holdings paid $71.6 million for the 86-room Epiphany Hotel, according to Santa Clara County public records. That purchase was for the hotel structure and a ground lease, a transaction that experts say underscores the white-hot job market in Silicon Valley. The deal was first reported in the Silicon Valley Business Journal. Combing the price paid for the building with the value of the ground lease for the property, the hotel was bought by Ellison’s group for a record-setting $1 million per room, estimated Alan Reay, president of Atlas Hospitality Group, which tracks the hotel market. “There is seemingly no end in sight in terms of how high the values are being pushed for quality real estate in Silicon Valley, especially in locations that are hard to duplicate,” Reay said. But the purchase by Ellison’s group of the hotel also points to the strength of the underlying economy in Santa Clara County and the Bay…

The Orange County Register 09/08/15 Ritz-Carlton, Montage Will Get New Owner as Blackstone Group Agrees to Pay $6 Billion for Strategic Hotels & Resorts By Jonathan Lanser http://www.ocregister.com/articles/hotels-681579-year-hotel.html The hotel buying binge continues. Two of Orange County’s landmark luxury hotels, the 393-room Ritz-Carlton Laguna Niguel and the 250-room Montage Laguna Beach, will get a new owner: a real estate giant that owns, among other things, the Motel 6 budget chain. Blackstone Group is buying Strategic Hotels & Resorts Inc., which owns the Montage and Ritz-Carlton, in a cash and debt deal worth roughly $6 billion. Chicago-based Strategic owns 18 luxury hotels, including San Diego’s Hotel del Coronado and the Essex House overlooking Manhattan’s Central Park. The deal is expected to close early next year. Hotels in the region have been changing hands at a blazing pace. A record $4.4 billion was spent to buy 174 California hotels in the first half of the year, according to Irvine-based Atlas Hospitality Group, a hotel consulting firm. This year’s sales spree included Strategic’s January acquisition of the Montage for $360 million, or $1.4 million per room – the highest valuation ever for a California hotel. Buyers have focused on the high end. Total…

San Diego Source 09/08/15 Hotel del Coronado Part of Blackstone Acquisition By Thor Kamban Biberman http://www.sddt.com/News/article.cfm?SourceCode=20150908czb&_t=Hotel+del+Coronado+part+of+Blackstone+acquisition The Blackstone Group which until last year had owned a majority stake in the Hotel del Coronado, will acquire the resort along with the rest of Strategic Hotels & Resorts’ assets for about $6 billion. A New York-based Blackstone (NYSE: BX) entity known as Blackstone Real Estate Partners VIII LP is by early next year set to acquire all outstanding shares of common stock of Chicago-based Strategic Hotels & Resorts Inc. (NYSE: BEE) for $14.25 per share in cash, and all of the outstanding membership units of the company’s subsidiary, Strategic Hotels Funding LLC, not held by the company, for $14.25 per unit in cash. Last year that Strategic acquired the remaining 63.6 percent stake in the 757-room Hotel del Coronado for $210 million in cash, plus the assumption of $475 million in mortgage debt. Blackstone bailed out the hotel by buying that 63.6 percent stake just before Strategic was expected to default on a $600 million loan in 2011. The exact terms as they pertain to the Hotel del alone weren’t clear; Atlas Hospitality Group pegged the hotel’s value at about $800 million…

International Meetings Review 09/02/15 How Meetings and Events Helped Revive San Diego’s Economy http://www.internationalmeetingsreview.com/california/how-meetings-and-events-helped-revive-san-diegos-economy-101990 The downtown San Diego hotel market lives on group business and leisure demand. The city’s bayfront convention center annually hosts nearly 50 shows and conferences, drawing more than 500,000 attendees. And the temperate southern California climate is a magnet for sun-seeking tourists. Like the rest of the United States, the San Diego market suffered during the last recession. Recovery was slower than for other major hotel markets, said Aaron Solaimani, an associate in the San Francisco office of HVS. “The reason is because San Diego doesn’t have an incredibly strong base of commercial roomnights,” he said. “It does draw business from the government segment, which is a type of commercial demand but generally lower-rated because of government per-diems.” Following the slow climb back from the downturn, the market has performed well in recent years with strong increases in performance metrics forecast through 2020. According to a Tourism Economics study, citywide occupancy was 74.6 percent in 2014 and is forecast to rise to 77.7 percent this year and above 78 percent in 2016 and 2017. Average daily rates will increase 6.1 percent this year and are expected…

The Press-Enterprise 09/08/15 Hotel Sales Volume in SoCal Shows 61 Percent Mid-Year Gain Hotel sales percolate in the Inland area; a Mexican bank wants to gain an Inland foothold By Debra Gruszecki http://www.pe.com/articles/hotel-779336-sales-million.html Hospitality investment is staging a comeback, if hotel sales over the first six months of 2015 are an indication. Atlas Hospitality Group’s mid-year Hotel Sales Survey reports a record $4.4 billion in sales across the California, and $2.3 billion in sales came from 67 hotel transactions in Southern California. Hotel sales volume eclipsed all previous mid-year totals since the Irvine-based hospitality industry reporting service started tracking sales in 1994, Atlas president Alan Reay said in the report. Across Southern California, the $2.3 billion in total hotel sales was up 61 percent from $1.4 billion in transactions over the January-to-June period of 2014. Twenty hotels sold in the Inland region for $130.4 million over the first six months, the survey said. Over the same period of 2014, 23 hotel sales took place in Riverside and San Bernardino counties and transactions totaled $89.1 million. The largest and most expensive Riverside County hotel sale was Renaissance Palm Springs, a 410-room property selling for $65 million. The largest hotel to be…

Santa Cruz Sentinel 09/06/15 Changes Ahead at Capitola Hotel By Jondi Gumz http://www.santacruzsentinel.com/business/20150906/changes-ahead-at-capitola-hotel A new owner is bringing Southern hospitality to the Capitola Hotel and contemplating how to update the 10-room lodging tucked into the beachfront village at 210 Esplanade. “I get asked all the time, ‘Do you know where it is?’” said Corrie Sid, 45, a graduate of Auburn University in Alabama and a mother of two, who took over at the end of July. The hotel was built in 1946. Sid’s goal is to “make the hotel what we think it should be.” She’s already begun talks with designers about the pineapple logo and with architects at Fuse down the street about potential room reconfigurations, trying to align everything for the hotel’s success. “She has so much energy,” said Wendy Melrose of Lina’s Floral, impressed she is “a woman in business trying to do it all,” wearing a matching ensemble and full makeup and sharing her ideas to upscale the property. “She introduced herself to all her neighbors,” Melrose said. “A lot of times, people don’t do that any more.” Sid put her psychology major to work in the corporate world in the San Francisco Bay Area, training…

The Registry 09/03/15 California Hotel Property Sales at Record High Values By Robert Carlsen http://news.theregistrysf.com/california-hotel-property-sales-at-record-high-values/ California hotel sales reached a record dollar volume of more than $4.4 billion in the first six months of 2015, a 64 percent increase over the same period in 2014, according to Atlas Hospitality Group’s recently completed 2015 Mid-Year California Hotel Sales Survey. This total dollar amount for a six-month period was greater than any annual total in the history of state hotel sales, except for 2006, Atlas added. Other statewide figures show unprecedented activity and results, including the median sales price per room increasing 25 percent and 13 deals that traded in $100 million-plus range versus four for the same period in 2014. Despite all the increases, the number of individual hotel sales actually declined 7 percent. The Irvine-based brokerage and research firm said that Northern California increased 83 percent in total dollar volume and Southern California was up 51 percent. In the first half of 2015, San Francisco City and County saw a 58 percent decrease in sales transactions, but a 120 percent increase in total dollar volume. “Even though we are seeing fewer sales, we are seeing more expensive transactions and bigger…

The Orange County Register 08/29/15 Four-Diamond JW Marriott Proposed for Disneyland Area By Art Marroquin http://www.ocregister.com/articles/anaheim-680062-hotel-city.html ANAHEIM – A developer has submitted plans to build a luxury hotel at the GardenWalk mall near Disneyland, becoming the first to take advantage of a hefty city subsidy that aims to entice more-affluent tourists to stay in Anaheim. The JW Marriott Anaheim would rise 12 stories with 466 guest rooms, ballrooms and meeting rooms on a 2.8-acre dirt lot near Katella Avenue and Clementine Street, within walking distance of Disney’s theme parks and the Convention Center. It would cost $150 million-plus to build the hotel, financed in large part by a 70 percent return on bed taxes collected there over 20 years. Opponents have challenged the deal in court. Despite the ongoing legal battle, developer Bill O’Connell Sr. said that “the time was right to move ahead,” and an application was filed Wednesday with Anaheim’s Planning Department. “With the JW Marriott, we are bringing a highly respected hotel brand that will do great things by creating jobs, boosting the hotel industry and attracting bigger and better conventions to Anaheim,” said O’Connell, head of O’Connell Hotels & Hospitality. He is developing the hotel with…

GlobeSt.com 08/24/15 Unique Issues Impact Hotel Performance By Carrie Rossenfeld http://www.globest.com/news/12_1181/orangecounty/hotel/Unique-Issues-Impact-Hotel-Performance-361016-1.html IRVINE, CA—Hotel owners have to deal with a myriad of issues that most commercial real estate investors don’t face, such as union labor, minimum-wage issues, ADA regulations and a host of others, Atlas Hospitality Group president Alan Reay tells GlobeSt.com. After the release of the firm’s mid-year California hotel-sales survey, we spoke exclusively with Reay about what it takes to be successful in the hotel sector. GlobeSt.com: What qualities do the most successful hotel investors have? Reay: First and foremost, it is management skills or having an association with a skilled hotel-management company. Second, it is knowing your product and market so you have the ability to move quickly when the right hotel becomes available for sale. Last but not least is capital and the ability to move on a purchase with very short contingencies, which can put you ahead of the other buyers trying to acquire. GlobeSt.com: What are the most popular types of hotels for investors today? Reay: This falls in to two main categories: 1. trophy hotels in “A” locations and 2. upper limited-service hotels, 10 years or newer, e.g., Hilton/Marriott brands. Examples are Residence Inn…

HotelNewsNow 08/26/15 California Raisin’ Prices as Deal Volume Drops With construction limited by available space and high costs, hoteliers in California are spending top dollar to buy existing properties. By Bryan Wroten http://www.hotelnewsnow.com/Article/16541/California-raisin-prices-as-deal-volume-drops REPORT FROM THE U.S.—Hoteliers spent a total of $4.4 billion in hotel sales in California during the first six months of 2015, an amount that outpaces every full-year total for the state since 1994 except for 2006, according to the Atlas Hospitality Group’s mid-year sales survey. The survey found that while the number of transactions between 1 January and 30 June 2015 decreased year over year from 2014, the sales prices increased by almost 64%. Thirteen transactions surpassed $100 million this year, compared to four in the first half of 2014. “For six months, it’s an absolutely phenomenal number,” said Alan Reay, president of Atlas. The decline in the number of transactions from mid-year 2014 (187) to mid-year 2015 (174) wasn’t much of a surprise, he said. The state saw a new sales record with 399 transactions for the full year of 2014, he said. In reviewing the average sale prices, Joel Hiser, principal for HTL Hospitality Advisors, cautioned that some of the more expensive transactions will…

San Diego Business Journal 08/18/15 San Diego County Hotel Property Deals Declined in First Half By Lou Hirsh http://sdbj.com/news/2015/aug/18/san-diego-county-hotel-property-deals-declined-fir/ The volume of San Diego County’s hotel property sales transactions declined 16 percent from a year ago in the first half of 2015, while the dollar volume of those deals slipped 1 percent, according to a newly released mid-year report by brokerage and research firm Atlas Hospitality Group. San Diego County saw a total of 16 hotels change hands in the first half, in deals totaling $696.5 million. The region’s largest hotel sold was the 419-room Hyatt Regency La Jolla at Aventine, purchased for $118 million by affiliates of Chicago-headquartered Walton Street Capital LLC and San Francisco-based JMA Ventures LLC. The biggest local transaction of the first half was the $259 million deal in which Blum Capital and the parent of Fairmont Hotels & Resorts purchased a majority stake in the 249-room Grand Del Mar in Carmel Valley, from Douglas Manchester. That property is now known as Fairmont Grand Del Mar. Atlas officials said California as a whole saw a record $4.4 billion in hotel transactions, including 13 properties that went for more than $100 million. That occurred even as the…