The Atlas report, based on sales of hotels in 2002, says hotels sold for an average of $56,212 in Orange County during the year, pushing San Diego County into second place in Southern California at $53,933 per room, with Los Angeles County third at $48,143 per room.

Costa Mesa-based Atlas says the 30 sales and $336.6 million total sales volume in Orange County during 2002 represented an 11.1% increase in the number of sales and a 137% increase in dollar volume compared with 2001. Atlas President Alan X. Reay called it a record year for Orange County, which posted the highest dollar volume of hotel sales in California, surpassing the total of all sales in Northern California, where the 2002 total was $224.6 million.

The 260-room Montage Resort & Spa in Laguna Beach was the largest sale in the entire state in 2002, at a price of $193 million. The Montage Resort & Spa was also the most expensive sale based on price per room, at $575,000, while allocating $35 million to the additional residential land included with the purchase.

Throughout Southern California, according to Reay, sellers in the $5 million and below category are receiving multiple offers on their properties as prices continue to get bid up. He says higher priced hotels, $10 million and above, only seem to attract buyers when prices are marked down to bargain basement levels. Prices for the $10 million and above hotels, he says, sometimes come in at 50% to 60% below replacement costs.