Atlas in the news
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Taylor Swift is about to boost L.A.’s economy. Striking hotel workers want her to stay away
BY CARLY OLSON, SUHAUNA HUSSAIN, HELEN LI JULY 27, 2023 4:11 PM PT Ticket prices aren’t the only eye-popping expense that comes with seeing Taylor Swift perform selections from her 10-album career on the final leg of her record-breaking Eras tour. With her six Los Angeles shows drawing fans from all over the Southwest, hotels near SoFi Stadium and around the city are booking up, sending rates through the roof. That’s a boon for L.A.’s tourism industry, which has been grappling with the effects of a rolling labor strike this summer since contracts expired June 30, affecting some 15,000 hotel workers. But Unite Here Local 11, the union representing workers at some 60 hotels in L.A. and Orange counties, wants to see Swift withhold her bounty until more of it can be shared with its members. On Thursday morning, L.A. hotel workers gathered for a curious crossover between a rally and a love letter to Swift. Housekeepers, front desk workers, cooks and other hotel employees protested in front of the Hyatt Regency LAX, urging the pop star to postpone her upcoming concerts in solidarity with hospitality employees, who are fighting for higher wages while hotels stand to profit enormously from her visit. Protesting workers held printed signs referencing the…
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Rancho Santa Fe resort sold for $100M — twice what seller paid a year ago
BY LORI WEISBERG JULY 25, 2023 5:33 PM PT Just a year after the Inn at Rancho Santa Fe was sold to a luxury resort operator, the century-old property has been sold yet again — this time for $100 million. While the sales price is more than twice what former owner Steve Hermann paid over a year ago, the century-old property is in the midst of a $50 million renovation that the hotel announced in late May would be completed by late summer. That has now been delayed until November. This story is for subscribers We offer subscribers exclusive access to our best journalism.Thank you for your support. The sale, announced on Tuesday, marks the third-highest hotel transaction in California so far this year, and, more significantly, it is the highest amount paid per room — nearly $1.2 million — for any hotel acquired this year in the state, according to the brokerage, Atlas Hospitality Group. The two priciest overall hotel sales so for this year have been the Claremont Resort, Berkeley, at $163.3 million, and the Standard West Hollywood, at $112.5 million, said Alan Reay of Atlas Hospitality. The 21-acre hacienda-style Rancho Santa Fe property, at one time owned by Petco Park…
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Resort Near San Diego Trades in Region’s Biggest Hotel Sale of 2023
GEM Realty Capital Pays $100 Million for The Inn at Rancho Santa Fe By Lou HirshCoStar News July 25, 2023 | 12:11 P.M. The Inn at Rancho Santa Fe, a luxury resort in a posh enclave near San Diego, has sold for about $100 million in the region’s largest hospitality transaction this year by price amid a rebound in travel as the pandemic wanes. Chicago-based investment firm GEM Realty Capital acquired the property with 80 rooms, built in 1922 at 5951 Linea Del Cielo, from Steve Hermann Hotels of Montecito, California, according to public filings and a statement from the seller’s broker. The sales price also ranks the deal as the third-largest hospitality transaction in California this year. CoStar data shows Hermann acquired the property in May 2022 for about $42.7 million before embarking on what brokers in the latest sale described as a “top-to-bottom” renovation that’s currently underway. The upgrade is expected to be completed in the fourth quarter. “The buyer recognized an incredible opportunity to acquire a five-star luxury resort in a market with extremely high barriers to entry,” Elliot Eichner, principal at Sonnenblick-Eichner Co., said in a statement. The brokerage represented the seller in the transaction. Eichner said the seller…
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Boutique Stays
BY BRYNN SHAFFER JULY 24, 2023 Palisociety, a collection of boutique hotels, is experiencing tremendous growth, despite the hotel industry still being in post-pandemic recovery mode. As part of that expansion, the Venice-based company recently opened a hotel in Hollywood, bringing the total number of properties in L.A. to seven. “Being able to have multiple outlets really allows us to be a better hotel company,” said Avi Brosh, the founder and creative force behind the Palisociety brand. Palihotel Hollywood, which opened its doors in June, is a cosmetic remodel of an original 1950s inn. Located directly off Sunset Boulevard, it’s situated courtyard-style with a large rectangular pool in the middle, allowing visitors to feel as if they’ve escaped to a vintage hideaway. “The bones were great,” Brosh said. While maintaining the built-in charm of the original architecture, Palisociety reimagined the property by painting the exterior green and revamping the overall asset with one-of-a-kind custom details. “The design is very intentional to pay homage to an old Hollywood vibe,” Brosh said. “But at the same time, it’s really meant to feel new, contemporary and upscale.” Palihotel Hollywood is made up of 74 guestrooms and suites – starting at $225 per night –…
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Suburban Chicago hotel owners trying to tread financial waters
Recovering occupancy may not be enough to avoid watchlists, distress By Rachel Herzog JUL 19, 2023, 11:00 AM UPDATED JUL 19, 2023, 6:00 PM In suburban Chicago, where a number of office landlords have seen their loans become delinquent or watchlisted, some hotel owners are also feeling the crunch. “In markets where you’re seeing the biggest dropoff in business and the most distress is markets that are heavily reliant on commercial and business travel,” Alan Reay, the president of hotel brokerage Atlas Hospitality Group, told The Real Deal. “We’re definitely seeing some impact in the hotel sector.” And lenders are keeping a close eye on large portfolios, as well as individual assets. The pressure is clearly on for borrowers to ramp up performance. A joint venture between Blackstone Real Estate Partners and Starwood Capital Group exercised its right to a one-year extension on a $4.7 billion floating rate loan that was scheduled to mature July 9 secured by a national portfolio of 560 limited-service hotels including more than 20 in the Chicago area. Special servicer KeyBank watchlisted the loan in May, according to a report to DBRS Morningstar. “We recently exercised our contractual right to a one-year extension option, and have the right to additional…
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Four East Bay hotels will be given to lenders in brutal lodging market
Decision points to ongoing weakness for Bay Area hotels By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group PUBLISHED: July 10, 2023 at 8:20 a.m. | UPDATED: July 10, 2023 at 3:34 p.m. OAKLAND — A wobbly hotel operator will surrender ownership of 19 hotels nationwide — including four in the East Bay — as a way to curb worsening debts, a grim new indicator of ongoing post-COVID hospitality ailments. Ashford Hospitality Trust, confronted by maturity dates last month on an array of loans, says it has aborted payments on certain mortgages, including two hotels in Newark, one in Oakland and one in Walnut Creek. The company will let lenders seize 19 properties around the country. “This is a prudent economic decision that reflects a comprehensive capital management process,” said Rob Hays, Ashford Trust’s chief executive officer. The East Bay hotels that Ashford Hospitality Trust will return to lenders are Courtyard by Marriott Oakland Airport in Oakland, Courtyard Newark Silicon Valley in Newark, Residence Inn San Jose Newark in Newark, and Embassy Suites Walnut Creek in Walnut Creek. “With business hotels, and in the case of Ashford Hospitality, you have hotel revenue down, expenses are up and you have a higher cost of financing when the…
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Hotel Industry Covid Bounce Back a San Diego Success Story
HOSPITALITY: SD County Hotel Business Among Top 10 in U.S. BY: KAREN PEARLMAN JULY 3, 2023 The Covid-19 pandemic kept travelers close to home and greatly impacted the hospitality industry, with staffing cuts and hotel closures not uncommon. But with the health emergency more in the rear-view mirror, protocols less restricted and visitors’ minds more at ease, travel picked up, optimism returned and local hotels bounced back in 2022, with numbers of visitors expected to continue to rise. The San Diego Tourism Authority recently released a report that said that last year, $13.6 billion of visitor spending generated by 28.8 million visitors to San Diego eclipsed the $11.6 billion spent locally in 2019. While SDTA said there were six million fewer visitors in 2019, visitors last year spent more time in San Diego than pre-pandemic (4.2 nights vs. 3.7 nights). Local hotels sold 17 million room nights last year, just shy of the 17.7 million sold in 2019. So the hotel industry is feeling optimistic as travel demand grows, with leisure and group business travel remaining strong and the trend for workplaces to allow employees to travel and work remotely. Tourism, Staycation Dollars Spur Remodels, Development – Advertisement – Evans…
San Francisco hotels struggle to make debt payments
Crisis approaches as loans mature and tourism rebound lags. JUN 9, 2023, 3:43 PMBy Pawan Naidu San Francisco hotels are approaching a debt crisis as many properties struggle to meet their loan service payments and higher interest rates make refinancing too expensive. According to a report by Trepp, 89 percent of lodging CMBS loans in the city have debt service coverage ratios of less than 1.25, meaning the hotels are barely making enough to cover their monthly loan payments. The largest of these loans were for Park Hotels and Resorts’ two-asset portfolio of Hilton Union Square and Parc 55. The company announced this week that it will cease making payments this month and the $725 million loan will be delinquent in July. The loan is set to mature in November and has an interest rate of 4.11 percent, according to data collected by Morningstar. Other large loans that are set to mature soon are for the Hilton Financial District hotel with a current balance of $87.5 million and The Four Points by Sheraton with a balance of $11 million. They respectively have interest rates of 5.28 and 4.14 percent, and mature in November and October of next year. “You have an interest rate environment now…
Luxury Hotel Plans of the World’s Richest Person Trail in Beverly Hills Vote Count
Arnault’s LVMH Says It Appears To Lack Votes for Cheval Blanc Hotel Construction Outside Los Angeles By Jack WitthausCoStar News May 30, 2023 | 1:38 P.M. A proposed luxury hotel appears to have been shot down by voters in Beverly Hills, California, after voters concerned about development and unions prevailed against the world’s richest person in a vote that is seen as having a potentially chilling effect on developers considering future hospitality investment in the city. French luxury conglomerate LVMH said in a statement late Friday its effort appeared to have fallen short by a narrow margin to allow the company to redevelop a former Brooks Brothers into a 109-room Cheval Blanc hotel at 468 N. Rodeo Drive along the world famous retail corridor. LVMH was down more than 120 votes, according to the Los Angeles County Registrar-Recorder/County Clerk on Tuesday. The election is expected to be certified Friday. LVMH’s founder, chairman and reported owner of about half the company is Bernard Arnault, who Forbes and Bloomberg have ranked as the world’s richest person. A spokesperson for LVMH said in the statement it won’t bring the hotel project back in any form if the final vote rejects the development. The project went through a two-and-a-half…
San Manuel casino owners buy 40% of Dana Point’s Monarch Beach resort
This is part of San Manuel’s diversification away from its legacy business, the Yaamava’ Resort & Casino at San Manuel. By JONATHAN LANSNER | jlansner@scng.com | Orange County RegisterPUBLISHED: June 5, 2023 at 10:23 a.m. | UPDATED: June 5, 2023 at 6:00 p.m. The San Manuel Band of Mission Indians, owners of the Yaamava’ casino and hotel in Highland, are gambling on the high-stakes Orange County luxury resort market. San Manuel announced Monday, June 5, that it bought a 40% stake in the Waldorf Astoria Monarch Beach Resort & Club in Dana Point. The 400-room, five-diamond hotel campus sits across the Pacific Coast Highway from the ocean on 162 acres. The tribe is partnering with Ohana Real Estate Investors, which paid $497 million for the resort in Dana Point in 2020. The property includes a six-acre private beach club, three swimming pools, and its own 18-hole golf course. Ohana and San Manuel did not disclose the dollar amount of the investment but noted the tribe has “the option to increase its ownership through one or more future transactions.” The complicated history of the Dana Point resort highlights the gyrations of the luxury resort business. It opened in 2001 under the St. Regis hotel chain, and after several ownership…
Downtown San Francisco Hilton hotels could net a discount for a patient buyer
By Alex Barreira – Staff Reporter, San Francisco Business TimesJun 5, 2023 Updated Jun 5, 2023, 5:25pm PDT The expected ownership change of the Hilton San Francisco Union Square and Parc 55 hotels could play a significant role in shifting local hotel market dynamics for the near term, arriving on the heels of several other debt-impacted hotel dispositions. The expression of diminished confidence by owner Park Hotels & Resorts — which said Monday it would stop payments on a loan behind the hotels, and work out an arrangement with the lender that it expects will remove the two large hotel properties from its portfolio — is likely to weigh on investors, experts said. It could become the latest notable instance of debt-saddled hotels hitting the market in San Francisco, following the recent sale of Nob Hill’s luxury Huntington Hotel and marketing of the defaulted Standford Court Hotel. It sets the stage for a a drop in San Francisco’s typically sturdier key prices. The Hilton and Parc 55 were valued at a combined $1.56 billion in an appraisal at the time of the loan underwriting in 2016, according to a CMBS industry report on the loan for bond investors. Should the outcome of the negotiations be Park (NYSE: PK)…
S.F.’s hotel pain could spread as more than 30 owners face mortgage deadlines
By: Roland Li | June 7, 2023 Park Hotels & Resorts’ plan to surrender ownership of two of San Francisco’s biggest hotels reflects the city’s slow tourism recovery and the widening financial distress hitting local property owners. The company plans to give up nearly 3,000 hotel rooms in the Hilton San Francisco Union Square and Parc 55 properties. Its expected $725 million loan default appears to be the largest U.S. hotel default during the pandemic. Though unmatched in size, Park Hotels is far from alone. Other San Francisco hotels such as the Huntington on Nob Hill and Yotel on Market Street were recently sold in foreclosure auctions. And more than 30 additional San Francisco hotels are facing loans due in the next two years, said Emmy Hise, senior director of hospitality analytics at CoStar, a real estate data firm. San Francisco has one of the slowest pandemic recoveries in the country, and its daily room rate of $234 in the past year is below 2019 levels, Hise said. Every other U.S. market is above 2019 levels, in part because of inflation. The city’s highest-spending leisure tourists were from China, and those travelers were barred from returning until the Chinese government ended its strict border policies earlier this year….
