OAKLAND — An Oakland hotel has been bought at a price that suggests the high-profile property’s value has nosedived since the end of the coronavirus outbreak.
Courtyard Oakland Downtown, a Marriott brand, was bought for $10.6 million, according to documents filed on Oct. 2 with the Alameda County Recorder’s Office.
The 162-room hotel in downtown Oakland was bought by an affiliate controlled by Core Property Capital, the county public records show.
The buyer paid a jaw-dropping 76% less than the $43.8 million that the seller, a Gaw Capital Partners affiliate, paid in 2016 for the downtown Oakland hotel.
Core Capital’s purchase price also is well below the hotel’s estimated value of $44.6 million as of January 2024, as calculated by the Alameda County Assessor’s Office.
The hotel is at 988 Broadway in downtown Oakland.
The five-story lodging property is a full-service hotel with 1,300 square feet of ground-floor retail and 2,700 square feet of meeting space.
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Core Property Capital, the hotel’s new owner, is a “private investor with known interests in 14 assets that have an estimated property value of $869 million,” according to commercial real estate reports.
The Bay Area hotel market has tumbled into a brutal downtown in the wake of the coronavirus, whose economic maladies afflicted the hospitality and travel industries worldwide and in the Bay Area.
Hotels in business-oriented markets such as San Francisco, Oakland and San Jose have been particularly hard hit.
The slumping value for this hotel – along with many other commercial real estate sites throughout the Bay Area – could hobble revenue for counties, cities and school districts that depend on property taxes to enrich their coffers.
The meltdown in commercial real estate values could trigger reduced assessments, a forbidding prospect for Bay Area government agencies.
Hotel purchases have imploded in California and the Bay Area, a fresh sign that post-coronavirus economic ailments, including high interest rates, still impair the weak lodging sector statewide.
Investors paid an aggregate of $447.5 million for hotels in Northern California during the first six months of 2024, according to a new report from Atlas Hospitality Group, which tracks the lodging market in the state.
“Higher interest rates, combined with the rise in operating costs, particularly in labor and insurance, are holding down sales volume and prices,” Atlas Hospitality reported in a market survey the company released during the summer.