County Bucks Hotel Sales Slump

ORANGE COUNTY, CA-The number of hotel sales in Orange County doubled in the first half of this year and the dollar volume tripled, bucking a statewide trend in which the number of transactions and dollar volume both plummeted, according to a new report by Atlas Hospitality Group.

The Costa Mesa, Calif.-based hotel consulting and brokerage firm says the number of sales in the county grew to 16, compared with eight in the first six months of 2001, while the dollar volume grew from $16.8 million to nearly $79.5 million.

“Orange County was the one area of the state that completely bucked the trend,” with the state’s biggest increase in sales, President Alan X. Reay of Atlas tells GlobeSt.com. He says the total for Orange County actually could have been higher, but Atlas did not count the sale of a part interest in the new Laguna Beach resort being developed by Marriott because it was not a 100% sale of the property.

“The investor interest in Orange County is still very strong,” Reay tells GlobeSt.com. “The new developments by Disney, the refurbished convention center, and the fact that there is very little new supply of hotel rooms have all worked in favor” of Orange County.”

The Atlast report lists the Best Western Newport Beach, with 45 rooms, as the most expensive sale in Orange County this year, based on a price of $135,119 per room. It was also the third most expensive sale in the state.

The Holiday Inn at Orange County Airport, with 180 rooms and a sales price of $12.1 million was the largest Orange County hotel sold in the first six months of 2002.

The Orange County statistics contrast with a statewide slump showing the number of hotel sales dropped to 100 for the first half of the year, compared with 122 during the same period last year. Dollar volume statewide slowed to $429 million from $663 million, according to the Atlas study.