UPDATE: The sale of the Sonesta Select hotel in Pleasant Hill for $12 million has just been confirmed, raising alarms about the ongoing struggles in the Bay Area lodging market. This transaction, recorded on September 25, 2023, highlights the persistent weakness in property values, which continue to impede recovery efforts for hotels in the region.
The 135-room hotel, located at 2250 Contra Costa Blvd., was sold at a staggering 38% below its assessed value of $19.4 million as of January 2025, according to documents from the Contra Costa County Assessor’s Office. This dramatic price drop underscores the challenges facing the Bay Area’s hospitality sector, which has been plagued by plunging property values and rising foreclosures.
The purchase was made by an affiliate of the Vinod and Nayna Patel family trust, with the sale facilitated by Hospitality Properties Trust, a real estate investment trust. The hotel’s location near the Interstate 680 interchange and Downtown Pleasant Hill, a bustling area known for its shops and restaurants, was not enough to shield it from the broader market downturn.
The Bay Area hotel sector has faced numerous hurdles since the onset of the COVID-19 pandemic, which devastated travel and hospitality industries worldwide. Although occupancy levels are slowly improving, the financial foundation for many properties remains fragile. Major lenders have been forced to seize assets from some of the region’s largest hotels, including the Signia by Hilton in downtown San Jose and the Oakland Marriott City Center, both of which were taken back through foreclosure earlier this year.
In San Francisco, additional high-profile hotels have fallen into distress. The historic Huntington Hotel on Nob Hill was seized by lenders in 2023, and the Four Seasons at Embarcadero is reportedly facing foreclosure. The Hilton San Francisco Union Square and Parc 55 San Francisco were also subjected to receivership after their owner defaulted on a $725 million loan.
As the Bay Area grapples with these emerging trends, the future of its hospitality market hangs in the balance. The implications of this sale extend beyond just property values; they reflect the ongoing economic challenges faced by the region.
Next Steps: Investors and stakeholders will be closely monitoring additional hotel sales and occupancy trends in the coming months to gauge whether this transaction is an isolated incident or part of a larger, troubling pattern in the Bay Area’s hotel market.
Stay tuned for more updates as this situation develops.
