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COMMERCIAL REAL ESTATE

Sales of Large Hotels Drop in 1999

March 21, 2000|E. SCOTT RECKARD

Rising interest rates and less investing by real estate companies held down sales of large hotels in California last year, but smaller properties sold well, according to a study released Monday by a Costa Mesa brokerage.

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 Atlas Hospitality Group study showed.

The number of sales in the area rose to 221 last year from 203 the previous year. In Northern California, sales prices dropped 53% to $641 million last year, and the number of sales fell to 95 from 110 the previous year.

Atlas President Alan X. Reay said interest rates on hotel loans have increased 1 1/2 to 2 percentage points, and that purchases by real estate investment trusts in California have fallen by more than 90%.

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