Banks are taking over several East Bay hotels. Here's why

ByLeslie Brinkley KGO logo
Wednesday, July 12, 2023
Banks are taking over several East Bay hotels. Here's why
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Four hotels in the East Bay are returning their leases to lenders.

WALNUT CREEK, Calif. (KGO) -- Hotels are closing in San Francisco due to a lack of business travel. In a post-COVID world, that is spilling over into the East Bay where the ownership of four key hotel properties are being surrendered to banks.

Ashford Hospitality Trust is letting lenders seize ownership of 19 hotels nationwide, including the 249-room Embassy Suites hotel in Walnut Creek across from the Pleasant Hill BART station. Ashford said in a statement, that they are walking away from paying the mortgages on the hotels to save over $300 million in payouts and capital expenditures in the troubled waters of the current hospitality market.

Bob Linscheid with the Walnut Creek Chamber of Commerce said, "We haven't talked to Ashford Trust, we've talked to the operator of the facility and they're naturally concerned because they all have jobs, and our belief is that because their occupancy numbers remain pretty strong, that operation will continue."

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Other East Bay hotels where the keys will be surrendered to lenders include a Courtyard by Marriott hotel and a Residence Inn, both in Newark, along with a Courtyard by Marriott at Oakland Airport. Post-COVID, business travel is down.

So, hotels based in business travel are faced with reinventing themselves as venues for leisure or special events and for a remote workforce.

Jason Long with HRS is an expert in providing technology to corporations to negotiate and book hotel space.

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"They have to rethink - it's not about staying overnight in a hotel and going into the office the next day, so they're repurposing and reengineering the hotels. We also have the "bleisure," phenomenon where business travelers are mixing leisure with business."

In Walnut Creek, the visitors bureau is promoting hotel stays for youth sports and college sports fans.

"I think our hotels are venturing into spaces where they can offer themselves to different markets and we're backing them up with marketing to help them get into that reinvention space until business travel comes back," said Executive VP Nicole Hankton.

In the meantime, the future of four East Bay hotels is uncertain as banks take control.

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