Feb. 20--Investors were more willing to gamble on resort sites and other hotel properties in 2013 than in the previous year, a report from a real estate agency that specializes in the marketing of hospitality properties found.
Renewed buyer interest in hotel properties included the high-profile sales of two resorts in the Coachella Valley area last year, according to the report leased Wednesday, Feb. 18 by Irvine-based Atlas Hospitality Group. But the majority of the sales recorded involved more modest hotel properties, including several Holiday Inn Express locations in Inland Southern California that were bought by investors last year.
Riverside County saw sales go from 23 properties in 2012 to 26, but the dollar value of all those properties soared 430 percent. That's because of the transactions involving two major desert-area resorts in the first half of the year.
The year for San Bernardino County was more indicative of the nuts and bolts of the market for hospitality properties. Twenty were sold in 2013, an increase of 33 percent from the previous year.
Alan Reay, president of Atlas Hospitality Group, said the market for these properties is starting to rebound.
"Obviously the hotel industry was deeply depressed in 2010 and 2011, and the Inland Empire was definitely hit very, very hard," Reay said in an interview. "But I would say the entire market has rebounded very well, especially in Los Angeles and San Francisco."
Reay said prices have been escalating in the major coastal markets. Buyers now are looking east for affordable properties, and the low interest rates are helping draw them in.
Many of these investment groups are Chinese buyers, Reay said. Investors from China have bought several, including the recent purchase of a Holiday Inn Express in Perris that was converted to a Red Lion Inn, he added.
"A lot of factors that draw investors are working in the Inland Empire right now," Reay said.
The largest hotel to change hands last year in San Bernardino County was a 151-room Holiday Inn Express in Colton. The most expensive sale of the year was a 110-room Holiday Inn Express & Suites in Barstow, which sold for $10.7 million.
Both of the major Coachella Valley sales were part of larger portfolios. The biggest sale was the 796-room La Quinta Resort and Club, which included a high-profile golf course. It was part of a package sold by Wall Street hedge fund Paulson & Co. to investors from Singapore.
The priciest transaction was Rancho Las Palmas in Rancho Mirage. It was valued at $132.7 million and was part of a package of resorts sold by KSL Capital Partners to Omni Hotels of Irving, Texas in June.
Contact Jack Katzanek at 951 368-9553 or at [email protected]