Advertisement
YOU ARE HERE: LAT HomeCollections

O.C. BUSINESS PLUS

Study Puts O.C. at Top in Hotel Sales in 1999

Tourism: Expansions at Disneyland, Anaheim Convention Center spur market activity, analysts say.

March 21, 2000|E. SCOTT RECKARD | TIMES STAFF WRITER

Fueled by Disneyland-area expansions, hotel sales in Orange County were more robust last year than elsewhere in the state, according to a study released Monday by a Costa Mesa brokerage.

The number of hotels sold in the county rose from 26 to 36, and the average price-per-room price rose 14% to $49,241--the biggest price increase of any county, according to the Atlas Hospitality Group.

Analysts attributed the hotter market to the large influx of visitors expected next year after expansions at Disneyland and the Anaheim Convention Center are complete.

The largest sale in the county was the 1,033-room Anaheim Marriott, which was purchased by Tarsadia Hotels in Costa Mesa for $75.2 million--about $73,000 per room. The most expensive price paid on a per-room basis was for Eilers Inn, a 12-room Laguna Beach bed and breakfast that went for $117,917 per room, or about $1.4 million.

Statewide, rising interest rates and less investing by real estate companies held down sales of large hotels last year, but smaller properties sold well, the Atlas study found.

Hotel buyers in the six-county area from Ventura to San Diego and the Inland Empire spent $1.1 billion, down from $1.3 billion a year earlier, the study showed. The number of sales in the area rose to 221 last year from 203 over the previous year.

The higher sales activity indicates that more smaller properties have been sold, while many major hotels are being held off the market for now, said Joel Hiser, executive managing director of Hospitality Asset Advisors, a unit of PKF Consulting in San Francisco.

Indeed, the strong economy has meant rising occupancy and room rates at most California properties, said Donald W. Wise of Wise Hotel Investments in Corona del Mar, so most owners can afford to wait for a better market.

"There isn't a compelling reason for someone to sell a hotel in this environment," Wise said.

The improved results also mean that travelers in California aren't finding many bargains--especially last-minute deals.

"The days of just calling up on Thursday to go away for a weekend at a nice resort are over," Wise said. "You should book two, three, six weeks in advance--or there will be no room at the inn."

In Northern California, the number of sales fell to 95 last year from 110 the previous year, and the total prices paid dropped 53% to $641 million.

Atlas President Alan X. Reay said the figures reflect interest rates on hotel loans that have increased 1 1/2 to 2 percentage points and a 90% drop in purchases by real estate investment trusts.

There were no transactions last year that were remotely comparable to the $225-million purchase of the Ritz-Carlton Laguna Niguel in Dana Point, which went for $572,519 a room in 1997 at a time when investors held the industry's prospects in far higher regard--and interest rates were lower.

A greater number of large upscale hotels sold in Los Angeles County, including the Miramar Sheraton in Santa Monica at $300,000 per room, Le Meridien in Beverly Hills at $268,078 per room and the Century Plaza in Los Angeles at $248,566 per room.

Advertisement
Los Angeles Times Articles
|
|
|