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Commercial real estate transactions strong in early 2016

On Behalf of | Aug 18, 2016 | Commercial Real Estate |

Hotel sales in California rose during the first six months of 2016. However, the pace of commercial real estate transactions involving hotel properties is slower than it was during this period last year. Still, hotels overall remain strong performers in the state.

According to research, the values of hotel sales increased more than 11 percent throughout the state in the early part of this year. However, this is a considerable drop from the increase of 25 percent that the state experienced last year during this time period. There has been less activity in the hotel sales arena this year since fewer high-profile, large properties appear to have been trading hands.

In Los Angeles in particular, there was a relatively healthy uptick in sales earlier this year compared to the rest of the state, but the dollar amount associated with these commercial real estate transactions fell 32 percent. Price appreciation is slowing down as the development of brand new hotels has started to pick up quickly. Some hotel investment groups are choosing to place greater focus on real estate development versus acquisition since there is a lot less inventory for sale these days, and the current offerings are being sold at prices that appear to be inflated.

While commercial real estate transactions involving hotels offer promise in the Golden State, buying, selling or developing hotels can be tricky. One mistake can lead to avoidable challenges or even cost a person a deal altogether. However, proper legal guidance may help individuals to navigate these transactions and ultimately achieve their aims in the California real estate market.

Source: sandiegouniontribune.com, “San Diego sees sharp decline in dollar amount of hotel sales“, Lori Weisberg, Aug. 15, 2016