Hotel Sales Slowing, Mid-Year Hotel Survey Reveals
Irvine, CA-based Atlas Hospitality Group’s 2016 Mid-Year California Hotel Sales Survey recorded a 38% decrease in hotel sales in San Diego County during the first half of the year, compared to sales during the same period in 2015. Total dollar sales volume dropped 65% to $242.1M, down from $696.6M from the previous year. Overall, California hotel transactions dropped 17% during the first half of 2016, from 174 sales in 2015 to 144, while sales dollar volume dropped 56.2%, from $4.4B to $1.9B. (Learn more about hotels in SD’s future at Bisnow's San Diego Hospitality Development Takeoff on Thursday.)
The largest hotel sold in San Diego County during the first half of 2016 was the 350‐room Marriott San Diego Mission Valley. The most expensive sale was $80.5M for the 284‐room San Diego Marriott Del Mar, or $281,700/room. The average price paid per room during the first half of 2016 declined 16%, but the median price per room rose 23%.
In July, however, the 372-key San Diego Marriott La Jolla (pictured) in University Town Center sold to NY-based Carey Watermark Investors 2, a real estate investment trust, for $131M, or $353,200/room.
California hotel sales values continued to climb during the first half of 2016, with the median price per room up 11.3%, but that was less than half the increase experienced during the same period in 2015. Meanwhile, Atlas Hospitality president Alan Reay characterized buyer attitudes as “cautious,” as they keep a watchful eye on the increase in new hotel inventory and how it affects the market.
More than 2,000 hotel rooms are under construction in San Diego County. Five hotels are opening this year in Downtown SD alone, adding 1,081 rooms, and another 7,400 are in the pipeline, according to the San Diego Union-Tribune. Despite the slowdown in sales, California hotels continue to enjoy very robust RevPAR increases, the report noted.