California Hotel Foreclosures Jump 91% as Lenders Seek to Sell Properties
The number of foreclosed hotels climbed to 191 in the three months ended June 30 from 100 a year earlier, according to the Irvine, California-based brokerage. Seizures also rose from the first quarter, when lenders took over 148 California hotels. The state’s biggest hotel foreclosure in the second quarter was the 331-room Hilton Sacramento Arden West, Atlas said.
The average U.S. hotel purchase price climbed to $192,479 a room in the second quarter, up more than 25 percent from 2006, during the property boom, according to Real Capital Analytics Inc. Values are being driven up this year by a surge in luxury- hotel transactions, the New York-based research company said.
“The rise in foreclosures can be largely attributed to lenders now having the financial reserves to be able to foreclose and sell the properties at today’s market values,” Atlas President Alan Reay said in a statement. The hotels being repossessed have been “in trouble for a long time and lenders were delaying taking any action,” he said in an interview.
San Bernardino and Riverside led the state in hotel foreclosures with 21 properties repossessed in each county, followed by Los Angeles with 16, Atlas said. The number of California hotels in default is down 24 percent from 2010’s second quarter, according to the hotel brokerage.
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