The Orange County Register
Southern California Hotel Buyers Gobble Up Smaller Properties
By Jonathan Lansner
Southern California hotel investors have switched gears, buying more but smaller properties in 2019’s first half.
According to Atlas Hospitalities semi-annual report on hotel transactions, 56 hotels in the four counties covered by the Southern California News Group were bought in the first half vs. 41 in 2018. My trusty spreadsheet tells me the region represented 39% of all California hotel deal so far this year vs. 31% in 2018.
With the buying increase came a smaller appetite. The average Southern California hotel sold had only 68 rooms this year vs. 104 in ’18. That helps explain why the price per room paid locally was on average 22% lower this year.
The regional trend is a sharp contrast to dealmaking in the rest of the state where 89 hotels were sold in the year’s first six months. That’s down slightly from 93 in 2018. The size of the average sold was flat at 82 rooms and price per room inched up less than 1%.
By county, you can see this more-sales/smaller-hotels pattern across Southern California:
Los Angeles County: 22 sales vs. 14 in ’18. Average rooms? 65 vs. 86. Priciest sale? 143-room Hyatt Place LAX:El Segundo for $44.5 million.
Riverside County: 12 sales vs. 13 in ’18. Average rooms? 62 vs. 118. Priciest sale? 502-room Westin Mission Hills Golf Resort in Rancho Mirage for $27.3 million.
Orange County: 11 sales vs. 8 in ’18. Average rooms? 103 vs. 119. Priciest sale? 254-room Newport Beach Marriott Bayview for $78 million.
San Bernardino County: 11 sales vs. 6 in ’18. Average rooms? 48 vs. 93. Priciest sale? 100-room Comfort Suites Ontario Convention Center for $14.3 million.