|By Kimberly Pierceall, The
Press-Enterprise, Riverside, Calif.McClatchy-Tribune Regional News
Apr. 24, 2008 - --The buying frenzy that has marked the hospitality industry recently is all but over, according to an annual hotel sales survey from Irvine-based Atlas Hospitality Group.
After a record-breaking $5.1billion worth of hotels were sold in California in 2006, last year, sales dropped 31 percent to $3.5 billion.
Alan Reay, president of Atlas Hospitality Group, a brokerage and research firm expects just 250 hotels to be sold in 2008 based on trends. It's the lowest number of transactions in the 12 years he has tracked hotel sales, he said. The amount spent on the 250 hotels will likely drop as well to $2.5 billion, about 50 percent less than the high-water mark in 2006.
Instead of having five buyers for every seller a year ago, Reay said his firm is seeing five sellers for every one buyer.
"I think there are definitely bargain hunters out there, but there are no bargains," he said, adding that few hotels have fallen into default with the exception of a few in the Coachella Valley.
Sale of the 560-room Renaissance Esmeralda in Indian Wells for $137 million to Irving, Texas-based FelCor Lodging Trust Inc. boosted Riverside County's figures, more than doubling the amount paid for 23 hotels in 2006.
Owners sold 27 of their hotels in the county last year including the Hotel Zoso in downtown Palm Springs which sold for $25.5 million in bankruptcy proceedings, the Courtyard by Marriott in Riverside which sold for $21.2 million, and Holiday Inn Express locations in Temecula and Corona which sold for $12.2million and $10.5 million respectively.
San Bernardino County had one less hotel sold in 2007 compared to the year prior, and the amount paid for the 21 hotels dropped 50 percent to $92million, according to the report.
It's no longer enough for a property to have potential. Buyers want two to three years of proof, Reay said.
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Copyright (c) 2008, The Press-Enterprise, Riverside, Calif.
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