Hospitality Lawyer on California Hotel Transactions. Our friends at Atlas Hospitality are one of the dominant hotel brokerage operations focused exclusively on California hotel properties. At JMBM's recent Meet the Money®, Tim Edgar, Senior Vice President of Atlas, gave conference attendees an update on "A Transactional View of Hotel Values" in California. Some of the numbers were surprising, and here is Tim's full presentation.

A Transactional View of Hotel Values in California

Only a year ago at Meet the Money® 2007, based on then-current trends (and before the credit crunch), Atlas predicted that 2007 would surpass the record number of hotels sold in 2006, sales prices would appreciate in Northern California, the number of new hotels under construction would dampen 2008 volume, and the number of hotels for sale would increase sales.

What a difference a year makes! This year, Atlas reported that 2007 sales declined 12% and sales volume was down 32%, although the median price per room in the San Francisco Bay area was up 50%. The number of hotels for sale had increased by 15% by year end 2007.

A few other highlights from the summary of 2007 sales results:

After reaching unprecedented heights in 2005 and 2006, 2007 saw the California market level off. The state's sales volume was $3.5 billion, a 32% decrease from 2006's record-breaking $5.1 billion. Individual transactions were down 12%.

There were some bright spots in 2007, including the 18% increase in the median price per room sold in California. The average price per room also rose, up 9%.

Individual transactions in Southern California were down 19%, but the median price per room increased 17%. Northern California had a 4% drop in transactions, but a 26% increase in the median price per room.

Predictions for 2008

Atlas certainly has its hand on the pulse of California hotel transactions. Here's what they forecast for 2008:

The total number of 2008 transactions will be down by over 30% from 2007. This equates to about 250 individual sales, one of the lowest figures seen in over 10 years of reporting.

Total dollar volume of transactions in 2008 will decline by over 30% to around $2.5 billion, almost 50% below the peak in 2006.

A number of factors will continue to negatively impact sales activity, including financing difficulty; Rev PAR growth slow down or decline, disconnect between buyers and sellers on price expectations.

Sales will continue to be slow through 2008 and at least through mid-2009.

Tim Edgar of Atlas Hospitality

By the way, I find this data to be an interesting complement to the national hotel transactional data presented by Suzanne Mellen of HVS. (See "Report on Major Hotel Transactions.")

Thank you, Tim!

This is Jim Butler, author of and hotel lawyer, signing off. We've done more than $50 billion of hotel transactions and more than 100 hotel mixed-used deals in the last 5 years alone. Who's your hotel lawyer?

Our Perspective. We represent developers, owners and lenders. We have helped our clients as business and legal advisors on more than $50 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at [email protected] or 310.201.3526.

Jim Butler is one of the top hotel lawyers in the world. GOOGLE "hotel lawyer" or "hotel mixed-use" or "condo hotel lawyer" and you will see why.

Jim devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM's Global Hospitality Group® – a team of 50 seasoned professionals with more than $50 billion of hotel transactional experience, involving more than 1,000 properties located around the globe. In the last 5 years alone, Jim and his team have assisted clients with more than 100 hotel mixed-use projects, all of which have involved at least some residential, and many have also involved significant spa, restaurant, retail, office, sports, and entertainment components – frequently integrated with energizing lifestyle elements.

Jim and his team are more than "just" great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them. They are a major gateway of hotel finance, facilitating the flow of capital with their legal skill, hospitality industry knowledge and ability to find the right "fit" for all parts of the capital stack. Because they are part of the very fabric of the hotel industry, they are able to help clients identify key business goals, assemble the right team, strategize the approach to optimize value and then get the deal done.

Jim is frequently quoted as an expert on hotel issues by national and industry publications such as The New York Times, The Wall Street Journal, Los Angeles Times, Forbes, BusinessWeek, and Hotel Business. A frequent author and speaker, Jim's books, articles and many expert panel presentations cover topics reflecting his practice, including hotel and hotel-mixed-use investment and development, negotiating, re-negotiating or terminating hotel management agreements, acquisition and sale of hospitality properties, hotel finance, complex joint venture and entity structure matters, workouts, as well as many operating and strategic issues.

Jim Butler is a Founding Partner of Jeffer, Mangels, Butler & Marmaro LLP and he is Chairman of the firm's Global Hospitality Group®. If you would like to discuss any hospitality or condo hotel matters, Jim would like to hear from you. Contact him at [email protected] or 310.201.3526. For his views on current industry issues, visit .

Jim Butler
+1 310 201 3526
JMBM