- California saw $4.1 billion in hotel sales in 2025.
- North up 104 percent on distressed sales; South down 22 percent.
- The statewide median price per room declined 7.2 percent to $138,409.
CALIFORNIA HOTEL MARKET closed 2025 with sales of about $4.1 billion, a 22 percent increase from 2024, according to Atlas Hospitality Group. Despite the rise in total volume and a 4.4 percent increase in individual sales, the market remains constrained by interest rates and a wide bid-ask spread.
Atlas’s “California Hotel Sales Survey: 2025 Year-End” reported 259 hotel sales statewide. The median price per room fell 7.2 percent to $138,409, while the average published-price transaction was $183,791, reflecting continued underwriting discipline.
High interest rates and the wide bid-ask spread slowed transactions, despite notable sales in the second half of the year. Distressed and lender-driven sales accounted for a large share of the market.
A late-year theme was price discovery through steep discounts on marquee assets. Distress spread beyond isolated trades as additional defaults pushed comparables lower.
North & South overview
Northern California dollar sales rose 104 percent from 2024, driven by large distressed transactions. In San Francisco, the Hilton Union Square and Parc 55 sold below prior valuations. The 1,919-room Hilton sold for $265.5 million, the state’s largest sale. Alameda County saw dollar volume rise 340 percent and median price per room increase 125 percent.
In Southern California, total dollar volume fell 22 percent. Orange County recorded the largest drop in median price per room, down 56 percent. San Diego County saw dollar volume fall 22 percent to $469.4 million, while median price per room rose 23 percent to $248,000, supported by the $111 million sale of the Embassy Suites La Jolla, about half its 2021 value.
Santa Clara County dollar volume rose nearly 900 percent to $241.5 million. The 541-room Signia Hotel San Jose sold in a foreclosure for $80 million. In Los Angeles County, 41 hotels sold for $736.1 million, with the largest sale being the lender-initiated 397-room Line Hotel Los Angeles for $68 million.
The report said 2026 is likely to remain a selective, price-sensitive market, with liquidity focused on well-positioned opportunities rather than a broad recovery.
A CoStar report found the U.S. hotel industry saw year-over-year RevPAR growth in January, the first increase since March 2025.
