Bay Area Hotel Sales Decline in First Half of 2025

The Bay Area lodging market is feeling the heat this summer.

As hotels in the Bay Area and across California fall into loan default and foreclosure, hotel sales in general have also suffered, The Mercury News reported.

“California individual hotel sales continue to lag,” Alan Reay, president of Atlas Hospitality Group, said in a report cited by The Mercury News. “Higher interest rates and continued disconnect between buyer and seller price expectations continue to create downward pressure on hotel sales transactions.”

Over the first six months of this year, the number of hotels sold in California declined when compared with totals during the same period in 2024, according to Atlas Hospitality Group. An estimated 113 hotels were bought in California in the first half of the year, down 7.4 percent from the 122 hotels that traded hands statewide over the same period last year.

Foreclosures have fetched some of the highest sales prices across the state. The largest hotel sales in three counties were all foreclosures; of those, one was in downtown Oakland and the other in downtown San Jose.

On July 8, the Oakland Marriott City Center, a 500-room hotel attached to the Oakland Convention Center, was taken back by lender Invesco in a foreclosure proceeding that valued the building at $70.2 million. In May, BrightSpire Capital seized the 541-room Signia by Hilton hotel in downtown San Jose in a foreclosure that valued the property at $80 million. In Southern California, the loan on the 397-room Line Hotel in Los Angeles’ Koreatown was foreclosed in a transaction placing its value at $68 million.

“These three sales accounted for a total of [nearly $218.2] million of sales volume, which is 15.7 percent of the entire dollar volume through the first six months of 2025,” Reay said. The total sales volume during the first half of this year was almost $1.4 billion, according to Atlas.

Those list-topping foreclosure transactions are followed by a bevy of low-priced sales that point to troubles in the hotel market at large.

Last October, the 162-room Courtyard Oakland Downtown was bought for $10.6 million, marking a 76 percent decrease from its prior value. That same month, the 289-room Radisson Oakland Airport got an appraisal of $15 million — a 70 percent drop from its previous value, according to The Mercury News.

The 142-room Hyatt House Pleasant Hill was foreclosed on in June. The month before, the 128-room Hyatt House Pleasanton was seized through foreclosure. The dual-branded AC Hotel and Residence Inn in downtown Oakland went back to lenders in a streamlined foreclosure process in April after Hawkins Way Capital defaulted on a $112 million loan tied to the property. Meanwhile, another Hyatt property, the 112-room Hyatt Place/Newark Silicon Valley, is in default and could be taken by its lender through a foreclosure, according to The Mercury News.

Other hotels, meanwhile, have been shutting down entirely. Last summer, the Hilton Oakland Airport Hotel abruptly shut down, eliminating 152 jobs. In January, the 145-room Waterfront Hotel in Oakland’s Jack London Square also suddenly shut down. The Radisson Oakland Airport has permanently closed.

During the first half of the year, average nationwide purchase prices were about $149,800 per room, or a 16.4 percent decrease from the $179,200 price per room over H1 2024, according to Atlas. Northern California saw a sharper decline than Southern California, Atlas said. NorCal’s average sales price per room was $129,500 in the first half of the year, down 28 percent from $180,200 year-over-year. SoCal’s average purchase price was $175,900 per room in t, a 1.3 percent decline from $178,200 in the same period in 2024.

— Chris Malone Méndez