""Deal-making stayed difficult," stated the report, which was prepared by Atlas Hospitality Group President Alan Reay."
""Financing costs, operating expense pressure (labor and insurance), and seller price resistance kept transactions from normalizing," Reay wrote in the report."
""Distress broadened beyond isolated trades, with more defaults and lender-driven outcomes adding downward pressure to comparables and keeping buyers cautious," Reay wrote in the report."
""2026 is still going to be tough for hotel sales," Reay said in an interview with this news organization. "The underlying factors are still the increase in expenses, which put pressure on net operating income for hotels. Plus, interest rates have come down, but not as much as people have expected.""
Southern California hotel purchases fetched a higher median price per room in 2025 while Northern California deals produced a sizable decline, causing California's overall median per-room price to fall. California hotels had a median price per room of $138,409 in 2025, down 7.3% from $149,222 in 2024. Northern California median price per room was $109,243 in 2025, down 14.8% from $128,181. Southern California median climbed to $171,642 in 2025, up 10.8% from $154,958. Financing costs, rising operating expenses (labor and insurance), seller price resistance, loan defaults, foreclosures and lender-driven auctions increased market distress and kept buyers cautious. Market conditions look likely to remain challenging into 2026.
Read at The Mercury News
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