The downturn shows no signs of relenting for Oakland’s hotel industry. A dual-branded Marriott is the latest casualty in the year-long slide of lodgings in the East Bay.
The 276-room downtown hotel, located at 1431 Jefferson Street, was handed over to lender Cook Children’s Health Care Services following a deed in lieu of foreclosure filed with the Alameda County Recorder’s Office.
Beverly Hills-based Hawkins Way Capital built the 18-story hotel, which opened in 2022, with a $112M loan from a unit of Goldman Sachs. In 2023, Goldman transferred the loan to Texas-based Cook, a nonprofit whose operations include a children’s hospital in Fort Worth.
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At the time of the deed in lieu transaction, unpaid debt on the loan was $117M, including fees, SiliconValley.com reported. The Jefferson Street hotel operated under two Marriott brands, a 133-room AC Hotel and a Residence Inn with 143 rooms.
The move continues on the recent blood bath in the area. For example, two months ago, Invesco CMI Investments filed a notice of default on a $100M loan backed by the 500-room Oakland Marriott City Center, the largest hotel in the city.
In 2017, Hong Kong-based Gaw Capital paid $143M to acquire the downtown landmark, located at 1001 Broadway next to the convention center. Invesco, which acquired the loan in May 2024, said in the default notice that it intended to sell the property at a foreclosure auction to recoup some or all of its debt.
Gaw Capital offloaded another downtown Oakland hotel property at a 76% discount in November. Gaw sold the 162-room Marriott-branded Courtyard Oakland Downtown, which it acquired in 2016 for about $44M, to Core Property Capital for $10.6M.
The 145-room Waterfront Hotel, an icon for 35 years in Jack London Square adjacent to the Port of Oakland, abruptly announced its last day of business at the end of January and shut its doors.
A week earlier, Wells Fargo filed a lawsuit in Alameda County Superior Court on behalf of lenders to the Radisson Oakland Airport hotel seeking a judicial foreclosure of the 289-room hotel after the owner defaulted on a $31M loan. In October, the Radisson Oakland Airport hotel’s valuation was assessed at $15M, a 70% drop from a 2018 assessment of $75M, according to a Morningstar report.
At the end of August, 360-room Hilton Oakland Airport permanently closed after 56 years at One Hegenberger Road. In June, Park Hotels & Resorts, which operated the Hilton, notified the Port of Oakland that it would be closing. Hilton has leased the 20-acre site for the airport hotel from the port since 1968.
Revenue per available room in Oakland slumped to $88.55 at the end of 2024, a 5.2% drop from the previous year, according to CoStar data.
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