COVID-19 has had a devastating impact on hotel sales transactions in every state – except California. California’s new hotel construction in 2020 also continues at slowed pace following a record-breaking pace set in the first half of 2019.
In 2020 the total number of hotel sales in the US plummeted by 52.6%, New York State was down 62%, Texas down 54% and Florida down 48%.
California on the other hand had a slight increase in sales from 2019, up 0.3% and accounted for 28% of all of the Sales in the US in 2020, according to Atlas Hospitality’s California Hotel Sales Survey 2020 Year-End.
California hotel sales transactions were 15.5% higher than Florida, Texas, and New York States, combined.
The total dollar volume of sales for California showed a decrease of 46% (the steepest decline since 2009), while the median price per room declined only by 5%.
SOUTHERN CALIFORNIA
Los Angeles County hotel transactions increased 19.6% in 2020 versus 2019, from 51 to 61. However, total dollar volume went down 39%. The county’s average sales price per room dropped 17.6%, while the median price per room went up 15.5%.
The largest hotel sold was the 502-room Renaissance Los Angeles Airport. The most expensive sale was the $100 million paid for the 116-room L’Ermitage Beverly Hills. It also led in price per room at $862,069.
San Diego County had a 10% increase in individual transactions, from 20 to 22. Total dollar volume went down 61%. The county’s average price per room decreased 12.1%, and the median price per room also decreased 3.4%.
The 211-room Hotel Palomar San Diego was the largest hotel sold at $62,838,000. Earlier in 2020, the sale was reported as the allocation value in a multi-property portfolio sale, which was included in our mid-year survey. The recorded value has since been updated from our mid- year survey.
The most expensive sale was the $67 million paid for the 192-room Residence Inn Mission Valley in San Diego. It also led on a price per room basis, at $348,958.
Individual transactions in Orange County increased 5.6%, from 18 to 19. Total dollar volume dropped 57%. The county’s average price per room decreased 33.7%, and the median price per room went down 21.5%.
The 532-room Newport Beach Marriott Hotel & Spa topped the chart in all categories. It was the largest hotel sold in 2020, the most expensive hotel at the price of $216 million, and led on a price per room basis, at $406,015.
Riverside County had a 12% increase in transactions, from 25 to 28. Total dollar volume increased 30.4%. The average price per room increased 17%; the median price per room increased 10.5%.
At $16 million, the 215-room Miramonte Resort Indian Wells was the largest sale. The Residence Inn Moreno Valley was the most expensive at $26.25 million. The 17- room Willows Historic Palm Springs Inn had the highest price per room in the entire State, sold at $1,112,588 per key.
Willows Historic Palm Springs Inn
San Bernardino County had a 5.6% increase in sales, from 18 to 19. Total dollar volume went up 19.8%. The average price per room dropped 6.75%, and the median price per room was up 46.76%.
The largest hotel sold was the 173-room Lake Arrowhead Resort and Spa. The most expensive was the 131-room Element Hotel Ontario, at $27.5 million. It was also the highest price per room sold in the County, at $209,924.
NORTHERN CALIFORNIA
San Francisco County had a 30.8% decrease in individual transactions in 2020, from 13 to 9. Total dollar volume went down 84.4%. The average price per room decreased 44.7%, and the median price per room went down 55.5%.
The 161-room Hotel Carlton in San Francisco was the largest and most expensive sale, at $63.2 million. The 30-room Inn at Union Square San Francisco led on a per room basis, at $440,000.
Alameda County had a 150% increase in individual transactions, from two to five. Total dollar volume went down 1.36%. The average price per room increased 66.6%, and the median price per room went down 63.2%.
The largest and most expensive sale was the $16.6 million paid for the 179-room Motel 6 Hayward. The 21-room Inn at Temescal in Oakland led on a price per room basis, at $150,000 per room.
Santa Clara County hotel transactions went up 37.5% in 2020, from eight to eleven. Total dollar volume was up 80.4%. The average price per room went up 3%, and the median price per room dropped 13%.
The 355-room Hilton Hotel in San Jose was the largest hotel and the most expensive, sold at $117.55 million. The Extended Stay of America in Milpitas had the highest price per room, $445,205.
Sacramento County had a 11% decrease in individual transactions, from nine to eight. Total dollar volume went down 34.6%. The average price per room went down 14%, and the median price per room rose 21.5%.
A 129-room La Quinta Sacramento North was the largest hotel sold. The most expensive sale was the $14 million paid for the 124-room WoodSpring Suites Sacramento. The Hilton Garden Inn Folsom led on a price per room basis, at $136,500.
SUMMARY
It is important to note that in 2020, a total of 78 California hotels were purchased using funds from Project Homekey, a California housing initiative.
Project Homekey was announced by California Governor Gavin Newsom in June and accounted for $890 million of hotel sales (the vast majority closing within the last month of 2020).
Without the huge investment from Project Homekey in California, the 2020 California hotels sales would have shown a completely different summary- sales transactions would have been down by 26% and total dollar volume down by 61%. In other words, the State sponsored program accounted for nearly a third of the total dollar volume of sales.
