California to See Record Number of Hotel Foreclosures



HotelNewsNow.com Staff
HotelNewsNow.com
June 26th, 2009

IRVINE, Calif., June 26 – The number of California hotels in default or foreclosed on jumped 125% in the last 60 days. The state now has 31 hotels that have been foreclosed on and 175 in default, according to California-based Atlas Hospitality.
 
With 19.6% of the total, San Bernardino County leads the state in foreclosed hotels. Riverside County follows with 16.1% and San Diego County has 12.9%. Los Angeles County, with 12% of the total, has the most hotels in default. San Bernardino County is next with 9.7% and San Diego County follows with 8.0%.
 
Non-franchised hotels account for a disproportionate number of foreclosures. They make up about 87% of the total. However, franchised otels [sic] make up 59% of the defaulted properties.
 
Initially, the wave of distress in California was seen by the smaller, non-flagged hotels in secondary and tertiary markets. As the hotel conomy [sic] worsened, we have seen it impact all property types. The properties range from the luxurious St. Regis Monarch Beach Resort in Dana Point to the more economical Extended Stay and Red Roof Inn chains.
 
No market or brand is immune in this downturn. In reviewing the hotels in default or foreclosed on, we found that over 75% of the loans originated from 2005 to 2007. During this period, over 2,500 California hotels either refinanced or obtained new purchase loan financing. Unfortunately, based on today’s market values, we estimate that none of these hotels have any equity remaining. The unprecedented decline in room revenues (California is down 21.5% year-to-date) combined with the jump in cap rates has resulted in a massive loss in values. We estimate that values are currently 50-80% lower than at the market’s peak in 2006-2007.

  Hotel Giants Target Tech-Savvy Millennial Travelers
At the latest breed of hotel, rooms are up to one-third smaller than traditional quarters, with furniture that looks fresh from an Ikea showroom.

  Grand Del Mar Hotel to Be Sold
The Grand Del Mar, one of the county’s top five-star resorts, is being sold next week to the Fairmont Hotels chain and a Northern California investor, although owner “Papa” Doug Manchester will retain a minority stake.

  Hotel Expert Predicts Record Year for Lodging Industry
San Diego hotel guru Robert Rauch predicted Friday that 2015 will turn out to be the best year for the hotel industry in San Diego and nationwide.

  SD Hotel Industry Strong, but with Pitfalls
The state of San Diego’s hotel industry was the topic of “An Extraordinary Year Ahead,” the 2015 Lodging Industry meeting Friday at the Hilton Garden Inn in Del Mar Heights.

  Hotel Sales Break State Records; Inland Transactions Zig-Zag
New records were set in hotel transactions across California in 2014, but Inland Southern California hotel sales had mixed results, a recent hospitality industry report says.

  Scotts Valley Hilton Has New Owner, Renovation Planned
The Scotts Valley Hilton has a new owner, who plans a $7 million renovation at the 174-room hotel and restaurant after the summer season ends.

  Bohannon's Menlo Gateway Lands Hotel
It's official: Bohannon Development Co. has landed a major hotel partner for its massive Menlo Gateway office campus — a deal that will allow the long-planned project to move forward while shaking up the region's hospitality scene.

  Hotel Boom O.C. Style
The Shorebreak in Huntington Beach, with its strong beach motif, seeks to set itself apart from some of the more generic hotels you might find anywhere in the country.

  Investors Snap Up Luxury Hotels Amid Rising Occupancy and Room Rates
Pampered guests at the five-star Montage Laguna Beach resort can swim in a lap pool overlooking the Pacific, dine on caviar and sleep on goose-down pillows to a lullaby of crashing waves.

  How'd You Miss the Hotel Revival?
You obviously knew in midrecession 2009 that hotel values would rocket back up, yes?

  O.C. Hotel Sales Set Record: Investors Spend $815.5 Million Buying 30 Local Properties
Hotel sales hit record heights in Orange County last year, and the momentum carried into 2015 with the $360 million purchase of the Montage Laguna Beach in January.

  Hotel Sales Spike in 2014
The number of hotels sold in Orange County more than doubled and their dollar value increased five-fold in 2014 compared with a year earlier, according to Irvine-based hospitality consultant Atlas Hospitality Group.

  San Diego Had Priciest Hotel Sale in State
A change in ownership at the Hotel del Coronado last year gave San Diego County the distinction of having the priciest hotel transaction in the state during all of 2014. Still, despite the more than $500 million valuation of the Hotel Del ownership change, San Diego still trailed other counties in terms of total sales last year, according to a report released Monday by Orange County-based Atlas Hospitality Group, a brokerage that tracks hotel transactions throughout California.

  Chicago Investor’s Buy Ups Bet on Resort Market
The Chicago-based investor that was reportedly exploring a sale of its lone Orange County property just 18 months ago has instead added to its local resort holdings. Strategic Hotels & Resorts Inc., a real estate investment trust that owns 18 high-end hotels in the U.S., late last month announced the $360 million acquisition of the Montage Laguna Beach, one of OC’s toniest resorts.

  Montage Laguna Beach Sells for $360 Million; Deal Shatters State Records
One of Southern California's most luxurious resorts, the Montage Laguna Beach, has been bought for $360 million by a Chicago real estate investment trust in one of the priciest hotel deals in years.

Name:


E-mail:


Phone:


Article:


Additional Comments:


 

 

 

 

 

 

 

 

 

 

Home   |   About Us   |  Advisory Services   |  Current Listings   |  Press   |  Contact Us

Atlas Hospitality Group is a Real Estate Broker Licensed by the California Department of Real Estate Under License Number 01216856