Hotel Construction in Los Angeles Declines

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 still being planned to be built. The product type that is being built is mid-size hotels such as Residence Inn by Marriott, Hampton Inn and Suites, 100 to 200 rooms, and very few as far as full-service hotels.

TPG Hotels & Resorts has been selected to manage the AC Hotel Tuscaloosa Downtown, located in Tuscaloosa, Alabama. The hotel features a fitness room, business center, four separate event rooms totaling 1,500 square feet of meeting space, the AC Kitchen and the AC Lounge.

There is now a sign on the Marriott AC Hotel in downtown Wichita, Kansas, as developer Sudha Tokala said there’s finally a realistic estimated opening for the business. Around this time last year, Tokala expected the 11-story hotel to open in spring 2024, which was delayed from a planned 2023 opening. Now, there’s only the lobby to finish, so Tokala said the hotel should open by late this year.

Concord Hospitality Enterprises Company has been selected by the Dayton Convention Center to develop a new headquarters hotel. The Montgomery County Convention Facilities Authority will enter into contract negotiations with Concord Hospitality within the next three months to come to terms on financing, schedule, concept design and other details for the new full-service hotel to be built on a city-owned plaza in Dayton, Ohio. Convention center leadership has said the new headquarters hotel could cost $60 million to $80 million. The goal is to create about 200 new hotel rooms at the property.

Azure Resorts & Hotels announced the Four Seasons Private Residences Las Vegas, an exclusive enclave featuring 171 high-rise residences situated within the MacDonald Highlands community, has surpassed $500 million in sales, propelling the project into its next phase of development, including initiating vertical construction before the end of 2024. Enhancing the project’s appeal, Four Seasons Private Residences Las Vegas has partnered with Wolfgang Puck Fine Dining Group as the exclusive food and beverage provider. Residents will have access to amenities such as private chef services, in-residence wine cellars, booking privileges within the North Tower’s private event spaces, a screening room and access to one of the most expansive wellness facilities offered by the Four Seasons brand, spanning over 6,000 square feet. The development also features multi-level, resort-style pools as well as a library located in the foyer of each building.

IHG Hotels & Resorts announced the opening of a new-build, dual-branded avid hotel and Candlewood Suites property in Fort Payne, Alabama. The dual-branded hotel features 48 rooms and 43 suites, an outdoor pool, fitness center and outdoor gazebo grills. avid hotel and Candlewood Suites Fort Payne are owned by Dhanraj, Inc. and managed by Integrity Hospitality Management.

Two Santa Fe couples’ vision for a downtown hotel blending history with modern style has finally come to fruition. The Palace Modern opened in August, just in time for the Indian Market. The 16-room boutique hotel is owned by married couples Seth and Kristen Anderson and Jim and Jay Heneghan. The group moved into the space, once home to Luxx Hotels, in 2021 and has been renovating it since. The new hotel occupies 8,000 square feet in a building that also houses two retail spaces. In the coming months, the hotel expects to add a new restaurant to the ground floor and a tasting room to the second-floor terrace.

Drury Hotels has started construction on a new Drury Plaza Hotel in North Charleston, South Carolina, marking the company’s second property in South Carolina and its seventh in the Carolinas. The hotel will feature 252 guestrooms, 3,600 square feet of meeting space, the Kitchen + Bar, business and fitness centers, and an outdoor pool and spa.

V&H Hotel Inc. announced the Manistee Hotel in Michigan will be transitioning into an EconoLodge later this month. The hotel is not merely changing its sign; significant upgrades to the interior and exterior are underway. In addition to the structural upgrades, the hotel is planning to open a restaurant and bar. Despite ongoing renovations, the hotel remains fully operational. A grand reopening is planned once the upgrades and rebranding are complete.

Newcrest Image has acquired the DoubleTree Suites by Hilton Hotel Columbus Downtown in Ohio, from an institutional seller. The deal was brokered by Hunter Hotel Advisors. The 15-story DoubleTree Suites features 194 suites, a business center, fitness center, lounge, restaurant, and almost 7,000 square feet of flexible conference space.

Smith Hill Capital and Bain Capital’s Special Situations team announced the firms’ joint venture originated the first mortgage financing for the Embassy Suites by Hilton Nashville Airport. The first mortgage has a total available balance of $57 million. The 305-key property offers fitness and business centers, an indoor pool, and over 6,000 square feet of meeting space. The joint venture worked with the teams at Affinius Capital and Westmont Hospitality and their advisors at Eastdil Secured on this financing.

Seven Hills Realty Trust (SEVN) announced the closing of a $16.0 million first mortgage floating rate bridge loan secured by the Home2 Suites by Hilton Lake Mary Orlando, a recently constructed 123-room, extended-stay hotel located in Lake Mary, Florida. The loan has a three-year initial term with two one-year extension options. SEVN’s manager, Tremont Realty Capital, was introduced to the transaction by Highgate, a New York City-based sponsor and a repeat borrower of SEVN.

Alakai Development has secured $135M in financing to build a 5-story Hyatt Place and Hyatt House Hotel on Nana Hope Street in Ewa, Hawaii. The project, located within the Hoopili master-planned community, will have 240 rooms including 132 for extended stays, an outdoor pool, spa, dining room, business center and fitness center. Construction began in August 2024 and is expected to finish by Summer of 2026.

Personnel Moves

Stonebridge Companies, LLC announced the promotion of Chris Cheney to Senior Vice President of Commercial Services. In his new role, Cheney will oversee all aspects of the company’s top-line operations, including Revenue Management, Sales & Marketing, and Digital Strategy.

Hotel Equities announced the appointment of Kevin Kragnes as Vice President of Capital Services. Kragnes originally joined HE as part of their strategic partnership with National Hospitality Services in 2023 and is now using his expertise to serve HE’s clients on a broader scale. Kragnes’ responsibilities as VP of Capital Services include securing capital for new developments, expansions and renovation, as well as overseeing relationships with lenders and investors and promoting new opportunities for tactical growth.

Europe Highlights

A Scottish village hotel, which can trace its origins back to a drovers’ inn in the 1700s, is up for sale, with offers around £3.25 million sought. Graham + Sibbald has been appointed to sell the Dunalastair Hotel Suites at The Square in Kinloch Rannoch, Perthshire. The extensively refurbished Dunalastair Hotel Suites now offers 32 suites, a lobby, lounge bar and restaurant, an inner courtyard, and a first-floor library/lounge.