3 Southland Hotels Put on the Market

In one of the largest hotel listings in Southern California this year, the Holiday Inn hotels in Santa Monica, and at Los Angeles International and Long Beach airports, are up for sale.

The properties, as well as a fourth Holiday Inn at Seattle-Tacoma International Airport that will be listed next week, are being sold by California investment group NAHOP Partners.

The sale comes at a time when the hotel industry continues to suffer from a slump in tourism and business travel. Hotel sales in California fell 22% last year as 207 hotels traded hands, down from 267 in 2001, according to a study by Atlas Hospitality Group, a Costa Mesa hotel broker and consulting firm.

“They’re good hotels, there’s no question about that,” Atlas President Alan Reay said. “But if we compare LAX and Santa Monica to last year, you’re probably going to see that revenue is down anywhere from 10% to 25%.”

As a result, hotel owners have been holding on to their properties while fewer buyers have been expressing interest in purchasing larger assets, Reay said.

However, Arthur Buser, managing director and head of West Coast operations for Jones Lang LaSalle Hotels, which is handling the transaction, said that because there are few properties on the market, he expects strong buyer interest.

The hotels, he added, could fetch about $100,000 to $200,000 per room. In particular, the 132-room Holiday Inn in Santa Monica has been a consistent performer, with occupancy not falling below 70% in a decade.

“Santa Monica is as close to the bulletproof market as there is,” Buser said. “It’s still a favorite leisure and group destination.”

Although the airport-hotel market has been especially hard hit by a drop in business travel, Buser said demand has picked up recently at the 401-room LAX Holiday Inn from the defense industry in El Segundo, and at the 234-room Holiday Inn at Long Beach Airport, where JetBlue Airways Corp. has its West Coast hub.