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San Francisco

San Francisco hospitality market saw mixed results in 2022

While the number of sales were up, the dollar amount was down

Atlas Hospitality's Alan Reay with the Ritz Cartlon
Atlas Hospitality's Alan Reay with the Ritz Cartlon (Ritz Cartlon, Getty, LinkedIn)

The San Francisco hospitality market had mixed reviews in 2022, according to a survey by consulting firm Atlas Hospitality. While the number of sales were up by a large margin, the deals closed for much less money than the year prior. 

San Francisco more than doubled the number of hotel sales in 2022 from six to 13, up 117 percent. However, the total dollar amount went up by just 6.6 percent from $567 million to $604 million, and the average price per room decreased 27 percent from $400,000 per room to $293,000.

The 336-room Ritz Carlton in San Francisco at nearly $207 million was the largest and highest priced hotel sale in 2022.

“The number of sales in San Francisco County jumped over 116 percent, but this was because of the sale of a number of lower-priced hotels. Individual sales more than doubled, but San Francisco County had the steepest decline in median price per room than any other county in California,” Alan Reay, president of Atlas, said.

In other Bay Area counties, the trends diverged in the various markets. Santa Clara County hotel transactions declined by 21 percent in 2022, from 24 to 19. Total dollar volume was down 54 percent from $1.2 billion to $559 million. The average price per room went down 4 percent to $218,000.

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The 510-room Marriott San Jose was the largest and highest priced hotel sale in 2022 at $246 million. This one sale accounted for 44 percent of the total dollar volume of sales in Santa Clara County.

Alameda County had a 45 percent decrease in individual transactions, from 22 to 12. Total dollar volume was down 70 percent from $499 million to $150 million. However, the average price per room increased 25 percent to $210,000.

The highest priced individual hotel sale in Alameda County was the $37.5 million paid for the 125-room Towneplace Suites in Newark.

As for California as a whole, sales were down 5.3 percent from 2021’s record year from 510 to 483 deals, but 2022 had the third-highest dollar volume on record at $8.6 billion compared to $9.9 billion last year. 

Despite sales being down in most categories, 2022 was “still a very strong sales year,” coming off the record 2021 year, Reay said. 

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