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 Sales in Area Fell 57% in ’09 Sales of hotel properties in the county plummeted by more than 57 percent last year, the consequence of significant declines in spending by business and leisure travelers and widespread financial distress among hoteliers.
Atlas Survey: California Deal Values, Volume Down Big in 2009 REPORT FROM THE U.S.—California hotel sales plummeted last year and values went along for the ride, according to Atlas Hospitality Group’s California Hotel Sales Survey Year-End 2009.
Industry Paradox: Construction Amid Foreclosures LOS ANGELES-Talk about a paradox: Downtown Los Angeles is home to the largest hotel to go into foreclosure in California in 2009, a 469-room Marriott, and yet it's also home to the largest new hotel opening up in the state this year the 1,001-room JW Marriott at L.A. LIVE. What gives?
Fewer Hotels Sold for Less Money in 2009 There were far fewer hotels sold in California last year for much lower prices, according to the latest annual report from hotel brokerage firm Atlas Hospitality Group.
The 2009 Hotel Scene: How Bad Was It? Worst year ever. That’s how a lot of hotel industry observers are looking back at 2009. Just consider the stats. Revenue per available room was down 17 percent to $53.71, occupancy dropped 9 percent to 55 percent, and average daily rate decreased 9 percent to $97.51, according to Smith Travel Research’s year-end report.
Atlas 2009 Year End Hotel Survey . . . and What It Means Hotel Lawyers with grim reports from the field. If lenders are looking for some encouraging news on their distressed hotel asset sales prospects, they are not going to get it anytime soon. That is what the Atlas 2009 Year End Hotel Survey shows, but it does offer some valuable tips for dealing with continued distress in 2010.
Locals Refuge Closes to the Public For Nancy Beach, eating at the Canyon Lodge American Grill in Aliso Canyon is more than just a filling breakfast before a challenging albeit short round of golf. It’s a spiritual experience.
Hotel Sales Will Increase, Along with Defaults IRVINE, CA-The number of hotel sales in California is bound to increase this year and will probably double, Alan Reay predicts, but that does not mean that Reay is offering an upbeat forecast. Reay, whose Irvine-based Atlas Hospitality Group recently issued its latest report on distressed hotels in California, tells GlobeSt.com that sales are almost guaranteed to increase this year because so few closed last year that 2009 marked a new low in statewide hotel sales―and because lenders who have been reluctant to foreclose on and sell hotels will finally start to shed some of the distressed properties this year.
DekaBank Makes Move for W Hotel in Union Square NEW YORK, Jan 21 (Reuters) - The W New York Union Square hotel could change hands again, just months after a foreclosure auction gave a junior lender control of the property.
Riverside May Lend Hotel Developer $20M Riverside officials are hammering out a deal to give a $20 million loan to a developer who plans a 125-room hotel near the reopened Fox theater.
Flat Tourism Growth Projected Hyatt Regency Suites will debut its multimillion-dollar renovation in Palm Springs next week.
Luxury Hotels Aim to Turn Downtown L.A. into Times Square West Jan. 15 (Bloomberg) -- Luxury hotel owners are betting that downtown Los Angeles -- an area dominated by government buildings, law offices and banks -- will lure convention visitors and tourists from the city’s ritzy enclaves.
Foreclosure Looms for 3 Local Hotels Three San Diego hotels are headed for foreclosure after a decision by their Orange County owner to stop making payments on debt that exceeds the rapidly declining value of some of its properties.
Bay Area Hotel Problems Mount Bay Area hotels with a combined value that tops $1 billion fell into a morass of loan defaults, a fresh sign of the woes being unleashed by a local economy mired in recession.
