|By Pat Maio, North County Times,
Escondido, Calif.McClatchy-Tribune Regional News
March 04, 2011--SAN DIEGO -- Hotel purchases in San Diego County rose 150 percent in 2010, with the average price paid per room strengthening 11 percent, in a sign that the local hotel industry has clearly emerged from the Great Recession, according to a hotel sales survey issued by Irvine-based Atlas Hospitality Group Inc.
The largest and most expensive sale in San Diego and Riverside counties was the $125 million paid for the 479-unit La Costa Resort & Spa in Carlsbad. The resort -- like many others in recent years -- got caught in the downturn when the economy crumbled. A year ago, the resort was taken over by private equity giant KSL Capital Partners LLC from Whitehall Street Global Real Estate LP. The new owners are spending $30 million to renovate the property.
"We usually track an average of 320 sales a year. We are still off 50 percent from where we should be at, but the volume we are seeing is definitely up, up, up," said Atlas President Alan X. Reay. The bottom of the hotel transaction market hit 92 deals in 2009, but rose to 166 last year, he said. He forecasts 200-plus sales this year.
The KSL purchase of La Costa Resort was the third biggest hotel acquisition in California, following the 400-room St. Regis Monarch Beach in Dana Point, and the 360-room Le Meridien in San Francisco.
"There will be continued strong buy activity on trophy hotels," Reay said.
Statewide, hotel transactions hit $1.78 billion last year, nearly triple the $524.9 million in deals done in 2009. The average price per room paid was $82,999, up from $71,132 in 2009. Reay sees prices paid per room rising 5 to 10 percent this year.
San Diego County's transactions rose to 15 in 2010 from 6 in 2009, with hotel purchases jumping to a total of $247.1 million in 2010 from $50.5 million the previous year. On a per-room basis, the average sale was $100,352 per room, up from $90,700 the year before.
Hotel sales in San Diego County lagged the $521.3 million done by leader San Francisco.
In Riverside County, where the market is largely centered in the hotel-rich Coachella Valley, hotel transactions doubled to 14 in 2010 from 7 in 2009. The average price per room dropped 10 percent to $54,153.
The San Diego County hotel industry is beginning to show a slow and steady recovery despite several hotels struggling with loads of debt, according to local hospitality industry experts. Veteran hotelier Robert A. Rauch said that newly constructed hotels in San Diego County are expected to grow in 2011 and 2012 at a slow 1 percent pace, compared with the roughly 55,000 rooms currently.
"It is loosening up more for acquisitions than development," Rauch said.
Call staff writer Pat Maio at 760-740-3527.
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Copyright (c) 2011, North County Times, Escondido, Calif.
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