The Latest on LA County's Hotel Sales
LA County hotel sales jumped 25% in the first half of 2014, according to Atlas Hospitality Group's latest mid-year California survey. Yet compared to first-half '13, the average deal size shrank—78 rooms versus 139—resulting in a 24% decline in total dollar volume to $155.3M. The largest among the County's 20 sales: the 320-room Sheraton Pasadena Hotel (above). Statewide, the total sales volume jumped 25% to nearly $2.7B, led by an 86% increase in NorCal's dollar volume despite recording the same number of deals as last year. The state posted four $100M-plus sales in first-half 2014, one more than the same period last year. An awakening economy, lack of new hotel supply, and an influx of Chinese and other overseas investors should continue to support an active hotel sales market in 2015, the company says.
The 215-key DoubleTree LAX-El Segundo sold for just over $33M, the first half's most expensive sale. Atlas VP Wilson Wang tells us there were a lot more smaller transactions compared to the previous year, but some of those traded at a high per-key price. For example, the Venice Rose Hotel, a 24-room SRO on Rose Avenue in Venice Beach, traded for $5.6M, which equates to $233k/key. Investment in the LA area is active and demand is across the board for properties large and small, Wilson says. That said, it's easier to do a smaller deal versus the larger or iconic properties, which may be subject to union activity or pending ordinances like the minimum wage proposal. In California in general, areas like LA, OC and the Bay Area are "the key war zones for investors. They're trying to grab hold of their position."