SpringHill Residence San Diego

San Diego in Midst of Hotel Building Boom

The San Diego Union-Tribune
02/20/16

San Diego in Midst of Hotel Building Boom
By Lori Weisberg

http://www.sandiegouniontribune.com/news/2016/feb/20/san-diego-in-midst-of-hotel-building-boom/

 

It was only six years ago that financial turmoil was roiling the county’s now thriving hotel industry. The iconic Hotel del Coronado was on the verge of defaulting on more than a half billion dollars in debt. San Diego’s then hippest hotel, the W, was in foreclosure. And a luxury downtown property that two years earlier boasted $600-a-night rooms was in bankruptcy.

What followed was a years-long drought of new hotel rooms that is a drought no longer.

Less than two months into the new year, a powerful resurgence in hotel values and revenues is fueling an El Niño-like deluge of development at a level not seen in at least eight years.

From Oceanside to Chula Vista, more than 2,000 hotel rooms are under construction, and at least 7,400 more are in the pipeline, awaiting development approvals and construction permits.

Two midrise properties within Liberty Station are under construction, as is a 300-room luxury hotel downtown, and a highrise on Lane Field is nearing completion. Further north, Oceanside has multiple mid-sized projects in various planning stages, while Legoland recently submitted a proposal for a second themed hotel just three years after opening its first.

Chula Vista hasn’t had a new hotel in 25 years, and this year it has a 300-room Residence Inn under construction, plus two more properties that are expected to start rising from the ground by early next year.

With San Diego hotel occupancies and revenues soaring past pre-recession peaks, developers are reviving stalled projects and revving up their deal-making for still others, said hotel consultant Alan Reay.

“Lenders who had shunned for many years doing construction hotel financing have opened up their checkbook and are willing to write construction loans again,” said Reay, president of Orange County-based Atlas Hospitality Group.

“From 2009 to 2013, we had very little in the way of new hotel development, and by the end of 2015, the amount of rooms under construction in California was 400 percent higher than everything that opened up in 2014, so it’s a phenomenal amount of new development by any measure.”

In downtown San Diego alone, there wasn’t a single hotel room completed between 2010 and 2015, said Civic San Diego, the agency that oversees downtown development. Currently, there are three hotels with more than 1,000 rooms under construction.

And the nearly 2,100 hotel rooms currently being built throughout the county exceeds all the hotel construction activity that occurred between 2009 and 2013, according to Atlas Hospitality

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