San Diego County’s hotel property deal volume rose 70 percent from a year ago in the first half of 2017, as transaction dollar volume increased 54 percent, according to a mid-year report from brokerage and research firm Atlas Hospitality Group.
Tracking deals above $5 million in value, Atlas data showed a total of 17 local hotels changing owners in the first half, in transactions totaling more than $372.1 million. The deals involved hotels with a total of 1,491 rooms, up 27.2 percent from the year-ago period, and the average price per room rose 1.7 percent to $173,911.
In San Diego County, the biggest transaction of the first half involved the 329-room Park Hyatt Aviara in Carlsbad, which was returned to its lender in a $185.6 million transaction. The property in June was placed back into special servicing due to the owners’ delinquency on a loan, but remains open for business.
Atlas President Alan Reay said in a statement that California set a mid-year sales record, with 206 hotel property transactions, beating a high of 187 set in 2014. Those statewide deals in the first half totaled $3.2 billion in value, the second-highest on record.
Atlas researchers said California is on track for a record of more than 400 individual hotel transactions to be completed in 2017, with quality hotels generating multiple offers. Factors spurring strong demand include attractive purchase loan terms, upward trends in revenue per available room, and a shortage of good alternative investment opportunities.
San Diego County is seeing similar trends in the realm of new hotel construction. In July, Atlas reported that the region saw a 96 percent increase from a year ago in the number of hotel rooms under construction in the first half of 2017.
Atlas noted that the local region had 10 hotels with 1,880 rooms under construction at the year’s mid-point, and another 76 hotels with 15,179 rooms in various planning stages.