The Real Deal
LA County Hotel Sales Hit a Record $1.7B in 2017: Report
The local market is expected to add thousands more rooms in 2018
By Dennis Lynch
Hotel sales in Los Angeles County reached a record $1.7 billion last year, as the city prepares for thousands of new rooms to flood the local market in the coming years.
The total is a $344 million increase in overall sales from 2016, according to a year-end report by Atlas Hospitality Group. The study also found that median price per room jumped up to $127,211 last year, exceeding $120,000 for the first time since 2008. That’s despite the fact that there were fewer transactions recorded in 2017 compared with the previous two years.
A pair of West Hollywood hotels topped the list of biggest deals in 2017, in total sale price and price per room. Starwood’s $280 million purchase of the Jeremy in West Hollywood in June was the largest transaction in total dollars. Jeff Klein’s surprise buyout of the 81-key Sunset Tower Hotel topped price per room figures. Klein paid $90 million, or $1.13 million per room, for the stake in the celebrity favorite hotel.
Late last month, Atlas Hospitality estimated that 10,000 new hotel rooms will come online in L.A. County in the coming years, a startling figure. Still, the estimate was less than one-third of what developers are currently planning.
This year, the hotel industry is expected to break all previous records for new rooms, including the one set last year when 4,300 opened. To give some perspective, the more than 5,000 rooms now under construction in L.A. County account for 25 percent of all rooms in the works throughout California.