Atlas in the news

Westbrook Partners defaults on loan tied to San Francisco Four Seasons

By Sarah Klearman and Alex Barreira – San Francisco Business Times | Mar 14, 2024 Updated Mar 14, 2024 5:50pm PDT This week Westbrook Partners was served a notice of default for a $72.5 million loan tied to 222 Sansome St., the home of the Four Seasons San Francisco at the Embarcadero. Westbrook, which acquired the 155-key hotel property in 2019 for $126.6 million, or about $816,000 per room, is behind more than $3.15 million in payments on the loan, per a notice of default recorded for the property March 3. The Florida-based developer has not made its monthly payment on its loan since December, per the notice, which states that Westbrook has 90 days to become current on its loan. If the investor fails to do so, its lenders could move to foreclose on the property, which occupies the top 11 stories of the 48-story tower at 345 California St. but is considered a separate property and employs the 222 Sansome address. Notices of default typically constitute the first step in the foreclosure process, though in some cases loan sponsors like Westbrook purposefully default on their loans as a way to commence negotiations with their lenders. Neither Westbrook nor…

Park Hyatt Los Angeles Unveils $14 Million Renovation Amid Sale Speculation

Sumitomo Realty & Development completes a $14 million renovation of the prestigious Park Hyatt Los Angeles, sparking market speculations and impacting the hospitality industry. Sakchi Khandelwal |  28 Feb 2024 14:29 EST Sumitomo Realty & Development has recently completed a lavish $14 million renovation of the Park Hyatt Los Angeles, a landmark hotel situated in the bustling heart of Century City. Opened in 1988, this prestigious hotel boasts a four-diamond rating from Mobil AAA, reflecting its high standards of luxury and service. Despite its newly refurbished state, there is speculation about its future ownership, stirring interest in the hospitality sector. Comprehensive Upgrades and Design Innovation The renovation project has transformed the Park Hyatt Los Angeles, encompassing extensive upgrades to its 366 guest rooms and a complete redesign of the lobby. The architectural firm Culpepper, McAuliffe, Meaders Inc. based in Atlanta led the redesign, infusing modern aesthetics while enhancing the hotel’s luxurious ambiance. This significant investment underscores Sumitomo’s commitment to maintaining the hotel’s prestigious status and appeal to both business and leisure travelers. Market Speculations and Strategic Considerations Despite the fresh upgrades, Alan Reay, president of Atlas Hospitality Group, suggests that the hotel may be put up for sale. This speculation…

San Diego sets record on price paid last year for luxury resort. So why the grim news for hotel sales?

Similar to what’s happening in the housing market, high interest rates are depressing the volume of hotel sales, which in San Diego County recorded their second biggest decline in 15 years. BY LORI WEISBERG | FEB. 29, 2024 5:30 AM PT San Diego made history last year when the upscale Inn at Rancho Santa Fe sold for a stunning $1.2 million a room — even as the volume of hotel transactions experienced one of the biggest declines the county has seen in 15 years. The pricey sale of the 85-room inn belies a distressing trend seen not just locally but across the hotel real estate market statewide: a sharp downturn in sales fueled largely by high interest rates and a skittishness among lenders to finance costly transactions. Last year marked the second steepest decline since 2009 for both the number of hotel transactions and overall dollar volume in San Diego County, according to a new statewide report released by the Orange County-based brokerage, Atlas Hospitality Group, which tracks sales throughout California. The rising cost of financing is concerning enough that it has some experts — including Atlas Hospitality — warning about the looming threat of hotel foreclosures as large debt repayments come due. While…

Sonoma County hotel sale tops California list for 2023, but plans for new Wine Country rooms remain sluggish

CHERYL SARFATY | THE NORTH BAY BUSINESS JOURNAL | February 19, 2024, 11:58AM Where in California do you think the most expensive hotel sale took place last year? If you said Sonoma County, you would be correct. In September, the Farmhouse Inn, a 25-room luxury property in Forestville, sold for $32 million, commanding $1,280,000 per room, according to Atlas Hospitality Group, a Newport Beach-based real estate brokerage firm that specializes in hotel properties across California. Foley Entertainment Group in September purchased a majority stake in the Farmhouse Inn from siblings Joe and Catherine Bartolomei. The duo retained 25% ownership of the six-acre property they purchased in 2001, The Press Democrat reported at the time. Atlas recently released its 2023 year-end hotel surveys for the state, one summarizing hotel sales, the other reviewing hotel development plans. The group also releases midyear surveys. Most of the hotel development plans will never see the light of day, said Alan X. Reay, president and founder of Atlas. “Lenders are currently burdened with loans that are maturing and borrowers are unable to pay off, which has them currently shut down on new construction loans,” he said. Markets where new hotels have a remote chance of coming to…

REAL ESTATEHOSPITALITY REAL ESTATE

Hotel Sales Sustained a Dismal 2023 BY BRYNN SHAFFER | FEBRUARY 19, 2024 California hotel sales plummeted last year, according to Atlas Hospitality Group, which recently released its 2023 end-of-year hotel sales survey. “The big jump-out is the dramatic or steep decline in number of transactions and dollar volume,” said Alan Reay, president of Atlas Hospitality Group, who’s been tracking California hotel sales for more than 20 years. “This is the steepest decline we’ve seen in the last 20-plus years, except for one year, and that was 2009.” Last year, individual hotel sales were down 45% over 2022 statewide, illustrating the second largest percentage decline in the last 15 years. Sales volume declined by 56%, the second steepest decline in sales volume in the last 15 years as well. For Reay, the biggest culprit behind these staggering numbers was the increase in interest rates. “What we have now is a disconnect between what buyers are willing to pay and what sellers want to sell for,” he said. “And that’s because sellers are used to what prices were in 2022 when interest rates were 50% below what they are today.” And within Los Angeles specifically, Measure ULA – the one-time real estate transfer…

Bullish Los Angeles beckons hotel investors

BY STEFANI C. O’CONNOR | FEBRUARY 13, 2024 Politics, economics, taxes, lending environment shape lodging landscape in the City of Angels. LOS ANGELES — As a city bullish on enhancing itself as a tourist mecca — ostensibly to ensure its lodging base flourishes—Los Angeles as a destination for hotel investors presents more as a mix of select opportunities and potential red flags. On one hand, market confidence-builders include a phased [ongoing] $30 billion investment to modernize Los Angeles International Airport (LAX); the opening this year of the L.A. Clippers new home, the Intuit Dome; the debut next year of the [George] Lucas Museum of Narrative Art; and subsequently, the FIFA World Cup and NBA All-Star Game (2026); Super Bowl LXI (2027); and the Summer Olympic and Paralympic Games (2028). In contrast, area politics and economics have been among key concerns for both existing and potential hotel investors of late, as much of it toggles to alleviating the plight of the homeless and broadening the scope of affordable housing in L.A. “Los Angeles, other than downtown, has been a historically under-supplied market; barriers to new supply are much higher today,” said Daniel Peek, president and chief operating officer at Hodges Ward Elliott. He…

Hotel Sales Are Still Diving in California

Investors are not in a hospitable mood as trade value drops by 56%. By Jack Rogers | February 15, 2024 at 06:53 AM Investment sales in hotels plunged by more than 56% in California in 2023 as investors kept their powder dry waiting for better market conditions—the steepest cliff-dive for the hospitality sector in the Golden State since the global financial crisis. Hotel transactions in California totaled $3.76B last year, less than half of the $8.6B in hotel sales volume in 2022. The 2023 tally is the lowest since 2009, when sales of hotels in the Golden State dropped by 75%. The plunge in hotel sales was more pronounced in Southern California, which saw its 2022 total of $5.8B pared to $2.3B in 2023. Sales in Northern California dropped to $1.45B last year, compared to $2.8B the previous year, according to the annual California Hotels Survey from Newport Beach-based Atlas Hospitality Group. The contraction looks worse when you consider the fact that SoCal’s total includes a $760M transaction: the foreclosure sale of the Fairmont Century Plaza Hotel. The largest deals in Northern California included a May transaction in which Redwood City-based Ohana Realty bought the 276-room Claremont Hotel Club & Spa in the…

Hotels On The Rebound, But Hospitality Property Sales Remain Grounded

Margaret Jackson | Mon, Feb 12, 2024, 9:43 AM PST Hotels may be performing better than they were during the pandemic, but that’s not propelling sales of hospitality properties any higher. Individual hotel sales in California plunged 45%, from 483 in 2022 to 265 in 2023, according to a CoStar report on Atlas Hospitality Group’s annual year-end California Hotels Survey. Dollar volume dropped 56.3% to $3.75 billion — the second-largest year-end drop in 15 years. In 2009, there was a 75% decline. “If I’m operating today, and my hotel is operating well, I’m not going to sell in today’s market because I’m used to what the prices were 12 to 18 months ago,” Atlas Hospitality Group President Alan Reay told CoStar. The cost of capital is what’s keeping sales stagnant. Higher interest rates can cause a property’s valuation to decline by millions of dollars. The pandemic brought higher sale prices because of the combination of lower interest rates and a ton of built-up capital. Federal regulators kept the number of distressed properties down by allowing lenders to be more flexible. Stimulus dollars distributed to individuals and businesses also helped. “There was a tremendous amount of tax money pummeled into the economy so…

5 Things To Know for Feb. 6

Today’s Headlines: Eric Danziger Retires as CEO of Braintree Group; Weather Patterns Disrupt Travel Globally; California Hotel Sales Drop by 45%; Majority of Hotels Report Staffing Shortages; FIFA Reveals 2026 World Cup Locations By Dana Miller | Hotel News Now | February 6, 2024 | 7:29 AM 1. Eric Danziger Retires as CEO of Braintree Group Hotel industry C-suite veteran Eric Danziger, CEO of Braintree Group and Resolute Road Hospitality, is retiring but will remain active on the board of directors. He has more than 50 years of hospitality industry experience. Danziger joined commercial real estate investment company Braintree Group in 2022. The company rebranded its Braintree Hospitality arm as Resolute Road Hospitality in 2023 to expand into third-party management. Danziger previously served as CEO of Trump Hotel Group for six years, joining the company in August 2015. Before that, he was president and CEO of Starwood Hotels, president and chief operating officer of Carlson Hotels Worldwide and president and CEO of Wyndham Hotel Group. 2. Weather Patterns Disrupt Travel Globally Travel across China for the start of the Lunar New Year holiday this weekend is already facing complications from snow and freezing rain. This year was projected to achieve a return to normal levels of…

Hotel Deals Plummet in Northern and Southern California Amid Economic Uncertainty

By Delia Reynolds | 2024-02-06 Hotel deals implode in Bay Area and California as economy turns murky Acquisitions of hotels plunged by 48.3% in Northern California and by 60.2% in Southern California Statewide, hotel purchase activity plummeted 56.3% in 2023 in California. The decline in sales activity is a result of hotel buyers staying on the sidelines at a time of economic uncertainty. Some hotels tumbled into foreclosure during 2023, while in other cases, hotel property owners simply walked away from making payments and gave the keys to their lenders Hotel deals implode in Bay Area and California as economy turns murky The market for hotel purchases has nosedived in both the Bay Area and California, indicating that investors believe the weakness in the lodging sector has yet to run its course. Impact of Economic Uncertainty Following Alan Reay, president of Atlas Hospitality Group, most investors are in a wait-and-watch situation due to economic uncertainty, leading to a decline in hotel purchase activity. Foreclosure and Abandonment Some hotels tumbled into foreclosure during 2023, while in other cases, hotel property owners simply walked away from making payments and gave the keys to their lenders.

Atlas Hospitality Group’s Year-End Survey: Understanding the Decline in California Hotel Sales

By The Registry Staff The Atlas Hospitality Group’s Year-End 2023 California Sales Survey revealed a substantial downturn in hotel sales across the state, characterized by a 45 percent decline in individual sales — a figure only eclipsed by the recession year of 2009. Sales volume decreased by over 56 percent, marking the second steepest decline in 15 years. Despite these challenges, the median price per room experienced a modest decline of just over one percent, maintaining its position as the second-highest on record. “2023 is the year we saw the second steepest decline in hotel sales in California over the last 15 years. The rapid increase in interest rates has created a huge disconnect between buyer and seller expectations and we have a huge number of buyers now sitting on the side lines waiting for distressed hotel sales,” said Atlas Hospitality Group President Alan Reay. Southern California Highlights Los Angeles County faced a 55 percent decrease in transactions, with a total dollar volume decline of over 35 percent. Despite this, the average sales price per room saw a 5 percent increase, albeit with a 17.6 percent drop in median price per room. The sale of the 400-room Fairmont Hotel at…

Tom York on Business: San Diego Shines, Bucks Statewide Decline in Latest Hotel Sales Survey

The president of Orange County hotel broker Atlas Hospitality Group has some good news for San Diego’s all-important hospitality sector. He says that sales of hotels in San Diego were up nearly 28%, according to his Atlas annual 2023 Year-End California Hotel Sales Survey. “San Diego County stands out in our 2023 survey as it saw the highest increase in the median price per room of any of the counties in the state- up 27.5,” Alan Reay told the Times of San Diego. “This shows how desirable hotels in the region are to investors as many view the market as having a much more diverse economic base than most of the other markets in the state, that is not heavily relying on any one industry, such as tech ( see what has happened in San Francisco and San Jose, for example).” “We see the demand for San Diego hotels continuing for all product types and locations,” he said. “It’s hard to see weakness in the local market and with all of the negative publicity we are seeing in cities like San Francisco, Los Angeles and Oakland (crime and homeless), “This will only drive more meetings/convention business to San Diego” he concluded. San Diego had a near 24% decrease…

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