Foreclosed East Bay Hotels Are Auctioned at Bargain Basement Prices
George Avalos, Bay Area News Group
Two hotels in the East Bay have been auctioned off at ultra-low prices that suggest the region’s lodging market remains frail six years after the coronavirus catastrophe.
To be sure, Bay Area hotel values have nosedived in recent years. Even so, the auction prices for the two hotels shocked Alan Reay, president of Atlas Hospitality Group, which tracks the California lodging market.
The 142-room Hyatt House at 2611 Contra Costa Blvd. and the 128-room Hyatt House at 4545 Chabot Dr. in Pleasanton were the hotels involved in the auction, which occurred in late March. Both hotels had been foreclosed in 2025.
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Hyatt House Pleasant Hill fetched a price of $3.5 million, according to Reay. That equated to a mere $26,600 a room.
Yet even that was sky-high compared with the value the auction placed on the hotel in Pleasanton.
Hyatt House Pleasanton was auctioned off for $800,000. That works out to $6,250 a room.
“These prices are shocking,” Reay said. “You are looking at two hotels that would easily cost $300,000 to $400,000 a room to build today.”
The values of the two hotels also stand out in sharp contrast to the purchase price for the historic Hotel De Anza in downtown San Jose. That 100-room hotel tower was bought in 2024 for $11.5 million.
At that time, the per-room price of $115,000 was thought to be the low point for the Bay Area hotel market. Hotel prices appear to have spiraled even lower.
Making matters worse, a growing number of Bay Area hotels, including big ones in San Francisco, downtown Oakland, and downtown San Jose, have been foreclosed, further undermining values.
The collapse in values for hotels throughout the Bay Area, along with weak prices for commercial real estate assets such as office buildings, could jeopardize revenue streams from property taxes, Reay warned.
“All of a sudden, you are going to find that property tax revenues for cities, counties, and school districts are going to be plummeting,” Reay said. “Public agencies are going to be faced with slashing their budgets, cutting employees, raising taxes.”
Hotels that are now owned at sharply discounted prices will be poised to undercut their competitors, which could shove room prices lower.
“This looks like a downward cycle,” Reay said. “This will impact all the other hotels that are in these markets.”
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