Largely because of a huge number of foreclosure sales in Southern California, twice as many hotels have gone on the auction block in the region than in Northern California since 1994.
But the price per room--an easy way of keeping tabs on the market--is still 22% lower in Southern California, according to calculations by the Atlas Hospitality Group in Costa Mesa.
In Orange County, though, the average price per room last year was $66,665, compared with $54,262 per room in Northern California and $42,322 in Southern California.
The main reason can be found in just one of the 25 sales recorded in the county, said Atlas Hospitality President Alan X. Reay. That was the $225-million sale of the Ritz-Carlton in Dana Point, which at $572,519 per room is one of the priciest hotel deals ever recorded in California.
The runner-up last year was the landmark Hotel del Coronado in San Diego, at $476,879 per room. The Intercontinental Hotel Los Angeles was a distant third at $103,926 per room, according to the Atlas survey.
The Ritz Carlton sale by Prudential Insurance Co. was part of a $549-million package deal for five luxury hotels. The buyer, a private group called Strategic Hotel Capital, is headed by Santa Fe investor Laurence Geller with financial backing from the Wall Street investment firm Goldman Sachs. Geller has declined comment on the sale.
A red-hot hotel market and a dwindling number of foreclosed properties are expected to continue pushing prices up this year, Reay said. Only 20% of the 1997 hotel sales in Orange County were foreclosures, compared with 50% in 1994.
E. Scott Reckard covers real estate for The Times. He can be reached at (714) 966-7407 and at firstname.lastname@example.org