22 hotels sold in Orange County for $807 million last year, down 19% and 54%, respectively, from 2015, when 27 hotels sold for $1.8 billion, according to Atlas Hospitality Group in Irvine.
The year-end report from hotel consultant and broker Atlas, though, shows a slight boosts in average and median prices per room for hotels that sold—partly a reflection of the prominent properties to change hands.
The 396-room Ritz Carlton, Laguna Niguel, in Dana Point, for instance, was the largest and most expensive OC hotel that got a new owner in 2016.
Blackstone Group LLC in New York sold the Ritz in September for about $366 million to Anbang Insurance Group Co. in China, in a $6.5 billion portfolio deal which also included Montage Laguna Beach; Montage sold for about $243 million in that deal.
The 306-room Hilton Irvine/Orange County Airport was another big 2016 deal in OC 2016. It sold to a China-based buyer in September for about $80 million.
The declines mirror a tightening market for hotel transactions in California and the hotel industry overall.
Atlas had projected at the beginning of 2016 that statewide sales volume would fall 20% to 30%; it was down 30%. Its 2017 forecast is for a decline of 10% to 20%.
Development continues apace in the county, however; Atlas’ 2016 report released last month show about the same number of rooms under construction and coming online in OC now compared with a year ago, with 40 hotels and 8,808 rooms in some stage of planning here.
Development is more attractive, said Atlas President Alan Reay because, “The price of existing hotels here is way above replacement costs.”