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Hotel Sales and Prices Rise in State

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Times Staff Writer

California hotel sales and prices jumped during the first half of the year as the hospitality industry recovered and large investors returned to the market.

The number of hotels sold in the Golden State rose 43% to 152 compared with the first six months of 2003 as the dollar volume of sales jumped 64% to $571 million, according to a study by Atlas Hospitality.

Every county saw an increase in the median price per room except San Francisco, where it fell 15% to $49,000. San Francisco is the only hotel market in the state that has not fully rebounded from the slump that racked the industry after Sept. 11, 2001, said Alan Reay, president of Costa Mesa-based Atlas.

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Several large investors including pension funds and real estate investment trusts have decided that hotels are more likely to appreciate in value in the next few years than other commercial real estate such as shopping malls and apartments, Reay said. Sellers include other real estate investment trusts that want to shed unprofitable hotels from their portfolios.

The largest sale in Los Angeles County during the first half of the year was the deal for the Renaissance Hollywood Hotel for $88 million, or $138,148 a room.

The largest sale in Orange County was that of the Irvine Marriott for $92 million, or $189,162 a room.

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