Two Anaheim hotels valued at nearly $130 million combined are expected to hit the market after its owner, Singapore-based Eagle Hospitality Trust, filed for Chapter 11 bankruptcy.
The hospitality real estate investment trust is looking to sell its U.S. portfolio of 18 hotels as a means to recoup losses largely caused by the pandemic.
Its portfolio includes the 255-room Holiday Inn Hotel & Suites Anaheim and 223-room Embassy Suites by Hilton Anaheim North.
Eagle Hospitality, which also operates the Queen Mary in Long Beach, has more than $500 million in liabilities, according to bankruptcy filings.
The company has secured $100 million in debtor-in-possession financing from Monarch Alternative Capital, pending bankruptcy court approval.
The company’s move could be an indication of future hospitality bankruptcies in 2021 as operators continue to struggle with diminishing occupancy and room rates nearly a year after the onset of the pandemic.
$129M Total Valuation
The Holiday Inn Hotel & Suites was built in 1978 and last underwent a renovation in 2017, according to Eagle Hospitality.
Eagle estimates the hotel, next to Disneyland Resort and about 1 mile from the Anaheim Convention Center, has a current valuation of $77.9 million.
It last sold in 2013 for an undisclosed price, according to Costar Group Inc. records.
The Embassy Suites property near the intersection of the Riverside (91) Freeway and Glassell Street, at 3100 E. Frontera St., has a valuation of $50.8 million, according to Eagle.
The 284,865-square-foot property was built in 1987 and renovated in 2018.
Anaheim Market
Tourism markets like Anaheim that rely on convention center and theme park business have been especially impacted by the coronavirus.
Hospitality consulting firm HVS notes the pandemic has hit the lodging industry harder than the past two recessions, combined.
The firm compared occupancy and average daily rate declines in the Anaheim/Santa Ana market during recent downturns, finding that occupancy in 2009 was down about five basis points from the year prior to 64%.
Average daily rates fell during the Great Recession from $123 in 2008 to $109 in 2009, an 11% drop.
Last year, meanwhile, occupancy dropped from the 2019 benchmark of about 78% to 43%, a 35-point decline; and ADR decreased approximately 19% to $134.
Waldorf Astoria
Coastal hotels in OC appear to be faring better, with demand stemming from local residents and tourists from nearby cities.
This could be good news for one luxury beach property that recently underwent a management change.
Waldorf Astoria Hotels & Resorts opened its first Orange County hotel last month with the debut of the Waldorf Astoria Monarch Beach Resort in Dana Point.
The rebranding of the Monarch Beach Resort comes about a year after Ohana Real Estate Investors LLC bought the 400-room property from KSL Resorts.
At nearly $500 million, the sale is the largest hotel deal on record locally.
