Atlas in the news

So far this year, just one new hotel in the county has opened — in downtown San Diego BY LORI WEISBERG AUG. 4, 2023 5:40 AM PT The pace of hotel openings across San Diego continued to be sluggish during the first half of this year, with just one hotel — in downtown San Diego — making its debut in 2023. It’s a trend being repeated across the state, according to Atlas Hospitality Group’s just released, mid-year hotel development survey. California has now seen a decline of more than 60 percent over the last two years in the number of hotels and rooms opened during the first six months of the year, the Orange County-based brokerage reported. Similarly, San Diego has experienced a marked two-year decline — 75 percent over the last two years, Atlas Hospitality reported. While construction activity has picked up year over year, don’t expect that trend to last well into the future, given the rising cost of financing and increases in interest rates, predicts Atlas President Alan Reay. “Those hotels that are opening now were planned at a time when interest rates were a lot lower and people were more bullish on the real state market,” Reay said….

20 hotels opened during the first half, 46% fewer than the average pace of 2018-21 AUG 2, 2023, 5:26 PM By TRD Staff Hotel California has become Hotel Terminus, with a steep decline in new hospitality suites across the state.  In the first six months of the year, 20 new hotels opened across the Golden State, down 31 percent in a year and 46 percent compared to the average pace of 2018-2021, the San Gabriel Valley Tribune reported, citing figures from consultancy Atlas Hospitality Group. In Northern California, prospects were worse than the state aveage, with 10 hotels opened — down 52 percent in a year and down 46 percent compared to 2018-2021. In Southern California, hotel prospects were slightly better, with 10 hotels opened from January through June — up 25 percent in a year but down 46 percent compared to 2018-2021. The outlook was just as sluggish when measured by the number of new rooms available in the first six months of the year. Across the state, 2,705 new rooms were available, down 24 percent in a year and down 42 percent compared to 2018-2021.  Southern California’s 1,210 rooms were up 65 percent in a year but down 51 percent…

Roland Li Aug. 2, 2023 Updated: Aug. 2, 2023 9:43 a.m. San Francisco’s only new hotel of 2023 is opening in September in the heart of the Financial District, in a major bet on the continued recovery of tourism and business travel. Owner KHP Capital Partners is rebranding the former Le Méridien hotel at 333 Battery St. as the Jay after a major renovation. The firm bought the hotel for $221 million in 2021 from Park Hotels & Resorts — the hospitality company that is also giving up two of the city’s biggest hotels after ceasing mortgage payments. While other real estate investors are fleeing the city, KHP is finishing up renovations on a new lobby, fitness center, meeting rooms and all 360 guest rooms. Two new restaurants operated by Omakase Restaurant Group are opening in the hotel: Third Floor in the fall and Sage at the beginning of next year. AvroKo is the interior designer. “We are strong believers in the ultimate recovery of San Francisco, and we love this Embarcadero location for both business and leisure travelers. That’s why we’re making a major investment to transform the property into the City’s leading lifestyle hotel, designed to uniquely reflect San Francisco and be a hub of…

‘We are forecasting a big decline,” says Atlas Hospitality By JONATHAN LANSNER | jlansner@scng.com | Orange County Register PUBLISHED: August 1, 2023 at 11:01 a.m. | UPDATED: August 2, 2023 at 8:32 a.m. “Crash, correction or chill” looks at economic and real estate trends that offer hints about the depth of housing’s troubles. Buzz: Building new hotels in California is no longer a popular endeavor, with openings cut nearly in half. Source: My trusty spreadsheet reviewed Atlas Hospitality Group’s mid-year hotel construction reports dating to 2018. Topline First, ponder the words from the industry analysts at Atlas, not the data. Start with the 2019 executive summary, written in the middle of a tourism boom … “2018 was a record-breaking year for California hotel development, and as we predicted, 2019 is on pace to eclipse it,” the snapshot enthusiastically stated. “Lenders and developers continue to be very bullish on new California hotels, as they see a very positive long-term outlook for the Golden State. The rapid rise in construction costs has done very little to dampen the supply of new California hotel rooms.” Now see what Atlas wrote four years later, in mid-2023, in a far more anxious timeframe … “Through the first six months of 2023, California continued to see a decline in the number…

By Alex Barreira – Staff Reporter, San Francisco Business Times Aug 1, 2023 – Updated Aug 1, 2023 5:11pm PDT The seeming torrent of new hotel supply that hit the California market in 2021 and 2022 after Covid delays is petering out in the Bay Area and throughout the state, a new hospitality research report suggests. Through the first six months of this year, just five new hotels have opened across the Bay Area’s nine counties, compared with 12 over that time in 2022 and 14 in the first half of 2021. A better point of comparison — the room count of those projects — shows 2023 pacing just 33% and 39%, respectively, of the previous two years at the midway point. The report, a mid-year development survey from Irvine-based hotel consultancy and research firm Atlas Hospitality, predicts a further slowdown of new hotel projects breaking ground based on several macro factors that hit particularly hard in the Bay Area. “We are clearly seeing the impact of the increased cost of new construction,” wrote Atlas Hospitality CEO Alan Reay in the report. “As interest rates and the scarcity of construction financing takes a hold, we are forecasting a big decline in new hotels…

Projects Entering Construction Phase Expected To Decline Over 18 to 24 Months By Bryan WrotenHotel News Now July 31, 2023 | 6:13 AM Fewer hotels opened in California in the first half of 2023 compared to last year, according to a new survey. Atlas Hospitality Group’s California Hotel Development Survey 2023 Mid-Year shows that 20 hotels opened in the state during the first six months of the year, a 31% year-over-year drop. The number of rooms opened was 3,561, also a 24% decline. The number of hotels under construction increased by 5.2% to 122 while the number of hotel rooms under construction remained relatively flat at 16,321 compared to 15,958 last year. Atlas forecasts a significant decline in the number of new hotels entering the construction phase over the next 18 to 24 months. The figure that jumped out for Atlas President Alan Reay was the 60% decline in hotel openings compared to the first six months of 2021. “But I think it’s no surprise to anyone,” he said. “Unless [your hotel was] actually under construction, the number of those projects is definitely drying up now, and primarily because of what’s going on in the marketplace — [rising] interest rates and…

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…

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…

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…

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 –…

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…

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…