Wednesday, August 5, 2026
California hotel sales increase in first half of 2026
Sales increased 13.3% and transaction volume reached $1.63 billion during the first half of 2026, according to Atlas Hospitality Group. San Diego County recorded more hotel sales than a year ago, but total dollar volume fell 31% as distressed properties c
California hotel transaction activity increased during the first half of 2026, though much of the growth was concentrated in Southern California and fueled in part by distressed property sales, according to a new report from Atlas Hospitality Group.
Individual hotel sales across the state rose 13.3% compared with the first six months of 2025, while total dollar volume climbed 17.2% to $1.63 billion, the report found.
The gains, however, masked uneven market conditions. Atlas said 36 of the state's 128 hotel transactions involved lender actions, including foreclosures, notices of default, bankruptcy proceedings or deeds in lieu of foreclosure. Those deals represented 28% of all sales and accounted for 37% of total transaction value.
Two distressed transactions alone generated about one-quarter of California's hotel sales volume in dollar terms, while Los Angeles County accounted for roughly one-third of statewide activity.
"The disconnect between buyer and seller expectations has begun to narrow, but elevated operating costs -- labor and insurance in particular -- continue to compress values on unencumbered assets," Atlas Hospitality Group said in its report.
The average price paid per hotel room increased 21.6%, although the median price per room declined 8%, suggesting weaker pricing among many smaller and midmarket properties. Atlas said two high-end transactions priced above $1.1 million per room heavily influenced the statewide average.
Southern California led the state's recovery. Hotel sales volume in the region increased 57% to nearly $990 million across 60 transactions, while Northern California sales fell 15.7% to about $642 million on 68 transactions, the report said.
Los Angeles County posted the largest gains, with hotel sales increasing 16.7% and dollar volume surging 124.1% to $545.1 million. The largest transaction statewide was the sale of the 190-room EDITION West Hollywood, valued at $211 million through a deed in lieu of foreclosure. Other major deals included the Westin Long Beach, which sold for $41.7 million, and the Residence Inn Pasadena, which sold for $65 million.
San Diego County saw more transactions but lower overall values. Hotel sales increased 28.6%, but total dollar volume fell 31.4% to $143 million. The median price per room dropped 29.3% to $142,342.
The county's largest sale was the 260-room Sheraton Mission Valley San Diego, which sold for $45.25 million.
Orange County hotel sales strengthened, with transaction volume rising 16.7% and dollar volume nearly doubling to $143.3 million. The largest deal was the sale of the 352-room Anaheim Resort Suites for $78.75 million. Three of the county's seven hotel sales involved lender-owned properties, according to Atlas.
Riverside County recorded eight hotel sales, double the number from a year earlier, while its dollar volume increased 355.2% to $71.2 million. The largest transaction was the sale of the historic 238-room Mission Inn in Riverside for $33 million.
Statewide, larger properties accounted for a greater share of sales activity. The median transaction value increased 17.8% to $6.9 million, while the median hotel size rose from 49 rooms to 59 rooms, the report found.
Atlas said it expects a continued divide between luxury hotels commanding premium prices and the broader market, where rising operating costs and financing pressures continue to weigh on property values.
Individual hotel sales across the state rose 13.3% compared with the first six months of 2025, while total dollar volume climbed 17.2% to $1.63 billion, the report found.
The gains, however, masked uneven market conditions. Atlas said 36 of the state's 128 hotel transactions involved lender actions, including foreclosures, notices of default, bankruptcy proceedings or deeds in lieu of foreclosure. Those deals represented 28% of all sales and accounted for 37% of total transaction value.
Two distressed transactions alone generated about one-quarter of California's hotel sales volume in dollar terms, while Los Angeles County accounted for roughly one-third of statewide activity.
"The disconnect between buyer and seller expectations has begun to narrow, but elevated operating costs -- labor and insurance in particular -- continue to compress values on unencumbered assets," Atlas Hospitality Group said in its report.
The average price paid per hotel room increased 21.6%, although the median price per room declined 8%, suggesting weaker pricing among many smaller and midmarket properties. Atlas said two high-end transactions priced above $1.1 million per room heavily influenced the statewide average.
Southern California led the state's recovery. Hotel sales volume in the region increased 57% to nearly $990 million across 60 transactions, while Northern California sales fell 15.7% to about $642 million on 68 transactions, the report said.
Los Angeles County posted the largest gains, with hotel sales increasing 16.7% and dollar volume surging 124.1% to $545.1 million. The largest transaction statewide was the sale of the 190-room EDITION West Hollywood, valued at $211 million through a deed in lieu of foreclosure. Other major deals included the Westin Long Beach, which sold for $41.7 million, and the Residence Inn Pasadena, which sold for $65 million.
San Diego County saw more transactions but lower overall values. Hotel sales increased 28.6%, but total dollar volume fell 31.4% to $143 million. The median price per room dropped 29.3% to $142,342.
The county's largest sale was the 260-room Sheraton Mission Valley San Diego, which sold for $45.25 million.
Orange County hotel sales strengthened, with transaction volume rising 16.7% and dollar volume nearly doubling to $143.3 million. The largest deal was the sale of the 352-room Anaheim Resort Suites for $78.75 million. Three of the county's seven hotel sales involved lender-owned properties, according to Atlas.
Riverside County recorded eight hotel sales, double the number from a year earlier, while its dollar volume increased 355.2% to $71.2 million. The largest transaction was the sale of the historic 238-room Mission Inn in Riverside for $33 million.
Statewide, larger properties accounted for a greater share of sales activity. The median transaction value increased 17.8% to $6.9 million, while the median hotel size rose from 49 rooms to 59 rooms, the report found.
Atlas said it expects a continued divide between luxury hotels commanding premium prices and the broader market, where rising operating costs and financing pressures continue to weigh on property values.
