Hotel Construction in Los Angeles Declines
Skift Take
Hotel construction in Los Angeles has significantly declined, with many projects facing foreclosure or bankruptcy, and financing difficulties limiting new developments.
The DJIA fell 93 points but Nasdaq was up 141, the S&P 500 rose 24 points and the 10-year treasury yield was down .05 to 3.65%. Lodging stocks were very weak today.
The Baird Hotel Stock Index was up 2.1% in August. Year to date the Hotel Stock Index increased in five of the first eight months of the year. The hotel brand sub-index was up 2.4% while the hotel REIT sub-index rose 0.8% for the month.
Hotel construction has been inching downward in Los Angeles from 49 projects with 7,650 rooms as of midyear 2020 to 19 projects with 2,121 rooms this year, according to Atlas Hospitality Group. Atlas is seeing a lot of projects that were under construction going into foreclosure or bankruptcy. Hotels are trading below replacement costs, which is making things more difficult. Another issue is the difficulty many are having in securing financing for hotel projects. Atlas doesn’t see a lot of new projects that are
