Hotel Sales Stable on No ‘Big Deal’

Hotel Sales Stable on No ‘Big Deal’

Orange County Business Journal

Hotel Sales Stable on No ‘Big Deal’
By Paul Hughes


OC hotels sold at a slightly lower rate for a markedly lower dollar volume last year—but results were affected by the lack of a trophy property sale in 2017, a survey by broker-consultant Atlas Hospitality Group in Irvine shows.

Twenty-two local hotels sold last year for $485 million, down from 23 and $807 million in 2016, for a transaction decline of 4.6% and a volume drop of 40%.

Average price and price-per room also declined.

A big sale in 2016—the 396-room Ritz-Carlton, Laguna Niguel in Dana Point went for $366 million—accounts for the entire decline on the deal side and more than the $322 million on the dollar side. The Montage in Laguna Beach sold in the same deal as the Ritz when Blackstone Group LP moved more than a dozen properties to Anbang, a China-based insurer, for more than $6 billion.

The two resorts skewed annual totals in 2015 as well when owner Strategic Hotels & Resorts sold both—acquired separately and nine years apart—to Blackstone.

By contrast, last year’s priciest deal was $125 million paid for the 440-room Fairmont Hotel in Newport Beach; it was renamed the Duke during a $30 million renovation and is set to be renamed Renaissance Newport Beach Feb. 19.

Hotel transactions in Los Angeles County declined 14% to 50 deals; dollar volume increased 26% to $1.7 billion.

Hotel transactions in San Diego County rose 38% to 29 deals; dollar volume was up 29% to $612 million.

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