Atlas in the news
Pandemic’s Effect on California Development Could Increase Hotel Values
https://www.costar.com/article/486141428?utm_source=newsletter&utm_medium=email&utm_campaign=hospitality_prospect&utm_content=p2 California’s Project Homekey Boosted Transaction Volume By Bryan Wroten Hotel News Now Feb 17, 2021 | 8:52 AM The COVID-19 pandemic has had opposite effects on California hotel transactions and development in 2020, slightly increasing the number of deals while slowing the pace of new construction. The slower pace of development and delayed openings last year, combined with temporary and permanent closures, resulted in a decline in California hotel supply in 2020, creating an unusual situation for hoteliers going forward, said Alan Reay, president of Atlas Hospitality Group. Reay’s company released its California Hotels Sales Survey 2020 Year-End Tuesday and its 2020 full-year development survey in late January. The sales survey found that while hotel sales in every other U.S. state fell compared to 2019 — even by as much as 62% in New York and 54% in Texas — California’s sales volume increased by 0.3%. Of the 298 hotel transactions in California amounting to nearly $3.3 billion last year, the state of California acquired 78 hotels for $890 million through Project Homekey. Without Project Homekey, California’s sales volume would have been down 26%, and the total dollar volume would have decreased by 61% instead of 46% compared to 2019. “There’s…
S.F. hotels have 83 million new reasons to sell to Project Homekey
https://www.bizjournals.com/sanfrancisco/news/2021/02/17/newsom-homekey-peskin-homeless-hotels-sale.html By Alex Barreira – Staff Reporter, San Francisco Business Times Feb 17, 2021 Updated Feb 17, 2021, 8:13pm PST A recent shift in federal policy has freed up $83 million in local funding for a state program meant to convert hotels into permanent housing, sweetening the pot for struggling hotel owners to flip their properties at alluring above-market rates. Last summer, Gov. Gavin Newsom launched Project Homekey, incentivizing hotel owners to sell their properties to local governments that would then convert them into permanent housing shelters at a fraction of the cost of new construction. The project drew dozens of interested sellers in San Francisco and turned the California hotel sale market into a national outlier — the only place where sales increased significantly amid the horrendous pandemic market. Now extra funds are at the city’s disposal to potentially buy more hotels. In January, the Biden administration announced it would reimburse city governments through the Federal Emergency Management Agency for 100% of the costs related to shelter-in-place hotels, covering January 2020 through October of this year. Because San Francisco had been shouldering these costs with the expectation of a 75% FEMA reimbursement under the Trump administration, the policy change freed up $83 million of general fund…
OC New Hotel Rooms Double in 2020
OC New Hotel Rooms Double in 2020 | Orange County Business Journal (ocbj.com) JW MARRIOTT, RADISSON BLU LARGEST IN STATE TO OPEN By Katie Murar Monday, February 8, 2021 Orange County hotel development bucked statewide trends last year, with 1,401 new hotel rooms opening in 2020, more than twice the amount seen in 2019. California, meanwhile, saw a 28% drop in new hotel openings as “COVID-19 has continued to decimate the hotel market,” according to a report by Irvine-based hotel consultancy and brokerage Atlas Hospitality Group. Orange County was the only Southern California region to see an increase in new hotel supply last year, with Los Angeles and San Diego seeing a 5.6% and 60% drop, respectively. The pandemic continues to have “a huge impact as construction was put on hold in many cases and new openings delayed,” the Atlas report said. Anaheim, Lake Forest Openings Seven hotels opened in Orange County last year, the largest being the 466-room JW Marriott Anaheim and the 326-room Radisson Blu Hotel Anaheim. These two properties near Disneyland also represented the largest hotel openings in the state last year. It’s the second consecutive year that OC has been home to California’s largest hotel opening. In…
Price for Sir Francis Drake could spell bad news for S.F. hotel market
What the Sir Francis Drake hotel sale says about the S.F. hotel market – San Francisco Business Times (bizjournals.com) By Alex Barreira – Staff Reporter, San Francisco Business Times Feb 8, 2021 San Francisco has a new hotel comp — and it’s not necessarily great news for the industry. The historic Sir Francis Drake hotel at Union Square is under contract to sell for $379,000 per room after closing costs, marking the first major hotel deal since the pandemic decimated the city’s convention and tourism industries. Hotel experts I spoke to say the price for the 416-room property — a total $157.6 million before closing costs — represents a substantial drop from pre-Covid values. Alan Reay, president of Atlas Hospitality Group, estimated the buyer scored a roughly 30% discount from the $225 million the hotel would have fetched in 2019, calling the sale “a fair price for both parties.” If it was sold last summer, before the rollout of coronavirus vaccines, the discount would have been steeper, at 50% to 60%, he said. “It’s not something I would look at and go, ‘That’s an absolute wholesale price for the buyer,’ ” Reay said. “It’s still a risk because they’re looking at a huge amount of…
COVID economy: Huge job losses hammer Bay Area hotels, restaurants
COVID economy: Big job losses hammer Bay Area hotels, restaurants (mercurynews.com) Hotel, restaurant job losses total nearly half-million in California By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group PUBLISHED: February 1, 2021 at 11:50 a.m. | UPDATED: February 2, 2021 at 6:49 a.m. SAN JOSE — Coronavirus-linked economic woes unleashed mammoth job losses for hotels and restaurants in the Bay Area and all of California last year, as business travel, tourism and dining out shriveled, an analysis of new reports shows. The Bay Area lost well over 100,000 hotel and restaurant jobs, a drop of 33.6 percent from 2019, according to figures compiled by Beacon Economics that were analyzed by this news organization. In California, the economic setbacks erased nearly a half-million lodging and dining jobs, a 29 percent drop from the prior year. “We’ll see a lot of hotel and restaurant jobs come back as we get the pandemic behind us,” said Jeffrey Michael, Stockton-based Center for Business and Policy Research at University of the Pacific. “But you won’t see all of those jobs come back. The hotel jobs connected to business travel and conventions won’t have as many jobs.” The hotel and restaurant sector nose-dived to a steeper degree than other industries that…
Pandemic Takes Toll on California Hotel Development Trends
https://www.costar.com/article/431511153?utm_source=newsletter&utm_medium=email&utm_campaign=hospitality_prospect&utm_content=p6 New Openings Drop by Nearly a Third in 2020 as Project Lending Remains Scarce By Lou Hirsh – CoStar News Jan 27, 2021 | 11:54 P.M. An almost 30% year-over-year drop in new California hotel developments and openings last year could be a sign of what’s to come in a state where hospitality demand typically has been among the highest in the nation. Many developers have put plans for new California projects on hold, and lenders remain wary amid the coronavirus pandemic’s devastating financial impacts. Irvine-based brokerage and research firm Atlas Hospitality Group, in its latest annual California development report, predicted that “the vast majority of hotels in planning will simply not get built or will be deferred for a lengthy period” as a result of the COVID-19 pandemic. The state’s hotel industry has been hammered since the pandemic brought global and domestic travel and conference business to a halt early last year. Data from travel research firm STR, a CoStar Group company, shows that pandemic-spurred plunges in occupancy rates, which shrunk by almost half from the prior year, caused total hotel revenue to drop 55% in Los Angeles County, 54% in San Diego County and nearly 60% in Orange…
Queen Mary Operator Files for Bankruptcy
https://labusinessjournal.com/news/2021/jan/25/queen-mary-operator-files-bankruptcy/ By Hannah Madans Monday, January 25, 2021 Eagle Hospitality Trust, the Singapore-based group that operates the iconic Queen Mary and the Sheraton Pasadena, has filed for Chapter 11 bankruptcy protection. In total, more than two dozen hotels and other properties were part of the filing by the company, which has more than $500 million in debt. Eagle Hospitality stopped trading on the Singapore Stock Exchange in 2019 after defaulting on a loan from Bank of America. While the company operates the Queen Mary, the city of Long Beach owns the property, and Eagle Hospitality has a ground lease. In a ground lease, different entities own the land and the improvements on the land. Ground leases on the water are not uncommon and can frequently be found in areas like Marina del Rey. The Queen Mary has been closed to the public since May due to the pandemic. Investment firm Urban Commons signed a lease to run the Queen Mary in 2016. In 2019, it created Eagle Hospitality Trust but ran into trouble. In the fall, the group ended its master lease agreements for Urban Commons hotels. Urban Commons owes hundreds of thousands of dollars of unpaid occupancy taxes to the…
Real estate: Owner of hotels in Bay Area files for bankruptcy
https://www.mercurynews.com/2021/01/21/real-estate-hotel-owner-bay-area-bankrupt-covid-economy-jobs-eagle/ Hotels in South Bay, Peninsula are caught up in owner’s bankruptcy By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group PUBLISHED: January 21, 2021 at 5:45 a.m. | UPDATED: January 21, 2021 at 3:32 p.m. SAN JOSE — The owner of two Bay Area hotels, one in San Jose and one in San Mateo, has filed for bankruptcy, grim new evidence of the widening economic woes the lodging industry faces while the coronavirus rages on. Eagle Hospitality Trust, which owns 18 hotels in the United States, including eight in California — the world-famous Queen Mary Hotel in Long Beach among them — has filed for a Chapter 11 bankruptcy in an attempt to reorganize its finances. Four Points by Sheraton San Jose Airport and Holiday Inn Hotel & Suites in San Mateo are among the hotels owned by Eagle Hospitality Trust, according to company documents and bankruptcy court records. Eagle Hospitality said 27 subsidiaries, formally known as corporate entities, were involved in the bankruptcy filing and that it’s possible buyers could be found for some or all of the 18 hotels. “The Chapter 11 entities intend to commence a marketing process to sell the relevant hotels,” Eagle Hospitality said in a release that announced…
Operator of Queen Mary in Long Beach files for bankruptcy protection
Operator of Queen Mary in Long Beach files for bankruptcy – Los Angeles Times (latimes.com) By HUGO MARTÍNSTAFF WRITER JAN. 20, 2021 3:48 PM The real estate investment trust that operates the Queen Mary in Long Beach and owns 26 other hotels filed for bankruptcy protection this week, signaling what could be the start of a wave of bankruptcies in the hospitality industry. The 85-year-old former ocean liner-turned-floating hotel has been suffering, like the rest of the nation’s hotel industry, from a dramatic drop in demand due to the COVID-19 pandemic. Eagle Hospitality Trust’s Chapter 11 filing represents the latest setback for the iconic vessel that Long Beach had hoped would be the crown jewel in an eventually thriving leisure district. The city of Long Beach, which owns the ship, issued a statement saying it will try to determine what Eagle Hospitality’s immediate plans are for the Queen Mary. The tourist attraction has been closed since May because of the pandemic. Eagle Hospitality Trust was created in 2019 by Urban Commons, the real estate investment and development firm that owns a 66-year lease to operate the Queen Mary and develop the 65 acres around it. The lease extends until 2082. The…
La Jolla firm joins rush to acquire financially troubled hotels amid pandemic
La Jolla firm joins rush to acquire financially troubled hotels amid pandemic – La Jolla Light The newly formed Torrey Pines Hotel Group will join a Los Angeles-based firm to buy up financially distressed hotels at discounted rates and manage them long-term. By LORI WEISBERG JAN. 18, 2021 10 AM As hotels struggle to survive a nearly year-long pandemic that has crushed business and leisure travel, an increasing number of companies are rushing in to acquire financially troubled properties at what they hope will be discounted rates. Jumping into the fray locally is the newly formed La Jolla-based Torrey Pines Hotel Group, which has partnered with Los Angeles-based investment firm Bainbridge DSX to not only acquire lodging properties across the globe but also manage them for the long term. The new joint venture, which has raised $500 million, is not focusing on any specific geographic niche but is setting its sights on 3.5- to 4.5-star hotels in the United States, Europe and Asia, according to longtime hotel executive Mike Slosser, who at one time oversaw several well-known San Diego County properties, including L’Auberge Del Mar. The plan, Slosser said, is to acquire 200 hotels over the next 15 years. The $500…
An inhospitable market? LA’s biggest hotel sales plunge in 2020
https://therealdeal.com/la/2020/12/18/an-inhospitable-market-las-biggest-hotel-sales-plunge-in-2020/?utm_source=internal&utm_medium=after_article&utm_campaign=related_article Large deals have been few and far between as investors wait out pandemic Los Angeles / December 18, 2020 08:50 AM By Matthew Blake | Research By Jerome Dineen This was a bad year to sell a hotel. Only two of the five biggest Los Angeles County hotel sales in 2020 would have made the cut for last year’s top five, according to an analysis of property records by The Real Deal. The lack of big-ticket sales reflected a lack of deals period. There were 23 hotel transactions in the county in 2020, according to brokerage Atlas Hospitality Group. That’s a significant drop from 50 in 2019 and 48 in 2018. A handful of the deals that did go down, said Alan Reay president of Atlas, were a result of “Project Homekey,” in which the state of California bought hotels to house the homeless. Reay blamed the sales tailspin on market uncertainty caused by the pandemic, as state laws forced hotels to close down — and also gave lenders cold feet on hotel deals. “It’s a wait and see situation,” Reay said. A deal that would have come in at No. 2 on the list, the 502-key Renaissance Los Angeles Airport Hotel, which recently sold for $92.5 million, has not hit public…
Palo Alto Hotel Sells For $32.7M: Report
https://patch.com/california/paloalto/palo-alto-hotel-sells-32-7m-report The Palo Alto property is among five Oxford Capital purchased for a combined $111 million according to the report. By Gideon Rubin, Patch Staff Dec 18, 2020 5:19 pm PT PALO ALTO, CA — A Palo Alto hotel has been sold amid a Chicago-based investment group’s Monopoly board-style Bay Area buying spree. Oxford Capital paid $32.7 million for the Creekside Inn in Palo Alto at 3400 El Camino Real, The Mercury News reports. The Palo Alto property is among five Oxford Capital purchased for a combined $111 million according to the report, and among two South Bay properties that sold for a combined $53.8 million. The investment group paid Oxford Capital paid $21.1 million for Hotel Los Gatos on 210 E. Main St. Oxford Capital paid a combined $57.2 for three San Francisco properties according to the report: The King George Hotel, Hotel Griffon and The Inn at Union Square in San Francisco. At a time when many investors are staying on the sidelines amid the uncertainty of the pandemic, Oxford Capital’s aggressive maneuvering has raised eyebrows. “We have been contrarian, value-oriented investors in the lodging sector for nearly 30 years,” said Oxford Capital’s founder and CEO John Rutledge told The…
