SAN JOSE — Hotel purchases have imploded in California and the Bay Area, a fresh sign that post-coronavirus economic ailments, including high interest rates, still impair the weak lodging sector statewide.
Investors paid an aggregate of $447.5 million for hotels in Northern California during the first six months of 2024, according to a new report from Atlas Hospitality Group, which tracks the lodging market in the state.
La Quinta Inn & Suites at 8465 Enterprise Way in Oakland. (Google Maps)
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Sales volume for hotels in Northern California nosedived 36.9% from the same six-month period in 2023, Atlas Hospitality reported.
Southern California purchase activity totaled $739.4 million over the first six months of 2024, which Atlas Hospitality estimated was down 53.7% from the same half-year period the year before.
California hotel buying volume totaled $1.19 billion during the first half of this year, which was down 48.5% from the prior year’s initial six months.
Three hotel deals were of interest during the first six months of the year in what was a brutal market for hotel investment activity, according to Atlas Hospitality:
— Alameda County: One hotel was purchased, Oakland’s 148‐room La Quinta Inn, at a $12 million price.
— Santa Clara County: One hotel was bought, the 51‐room Comfort Suites San Jose Airport, with a purchase price of $10.25 million.
— In San Francisco, the most expensive hotel deal was the purchase of the 136‐room Da Vinci Hotel San Francisco for $16.5 million.
“The lingering impact of higher interest rates, combined with the rise in operating costs, particularly in labor and insurance, are holding down sales volume and prices,” Atlas Hospitality Group reported.
