OAKLAND — A downtown Oakland hotel has been bought at a price that suggests the high-profile property’s value has nosedived since the end of the COVID-19 pandemic.
Core Capital paid $10.6 million for Courtyard Oakland Downtown, a jaw-dropping 76% less than the $43.8 million that the seller, a Gaw Capital Partners affiliate, paid in 2016, according to documents filed on Oct. 2 with the Alameda County Recorder’s Office.
The purchase price also is well below the hotel’s estimated value of $44.6 million as of January, as calculated by the county. The 162-room Marriott-branded hotel in downtown Oakland was bought by an affiliate controlled by Core Property Capital, records show.
The five-story lodging property, located at 988 Broadway, is a full-service hotel with 1,300 square feet of ground-floor retail and 2,700 square feet of meeting space.
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 downturn in the wake of the pandemic, whose economic maladies afflicted the hospitality and travel industries. Hotels in business-oriented markets such as San Francisco, Oakland and San Jose have been particularly hard hit.
The slumping value for Courtyard Oakland Downtown – 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 also trigger reduced assessments, a forbidding prospect for government agencies.
Hotel purchases have imploded in California and the Bay Area. 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.