Berkadia Anchors West Coast Hotel Business in L.A.

Los Angeles’ hot hotel market has lured Berkadia’s Hotels & Hospitality group. The group has opened its first formal West Coast office, choosing the L.A. market because it is a top market for investors. Berkadia has seen increasing interest in Southern California in general for both hotel investment and hotel development, and says that California was one of the top markets for hotel transactions in 2017. “We chose L.A. because of the size and strength of its market. It’s one of the top five hospitality markets and one that many investors are eager to break into,” Matthew

Bailly, senior director at Berkadia and the head of the new West Coast office, tells GlobeSt.com. “With the support of Berkadia’s existing presence in the SoCal region—in addition to the LA office we have offices in El Segundo, Irvine, Murrieta, San Clemente, San Diego, Pasadena and Woodland Hills—we’ve been able to hit the ground running. Sustained regional growth, strong development and favorable cap rates make these markets incredibly attractive to investors, but also very competitive. Our increased presence in the region will enable us to help clients identify and capitalize on truly valuable opportunities.”

Los Angeles will also serve as a hub to grow the hotel business in other emerging markets, including the Mountain West market, particularly Denver, Boise and Salt Lake City. “This office is also a strong entry point for access to the entire Western portion of the US,” says Bailly. “We’ve been active across the West, including a recent hotel sale in Montana, but our goal is to keep expanding and we’re confident we’ll have more opportunities to do so now that we’re fully bicoastal.”

While this move was part of an external expansion plan from the firm, the healthy hotel market on the West Coast supported the decision and the timing. “The hospitality sector is thriving and we’ve been doing some great work, but are constantly looking for new and better ways to expand our capabilities and access so that we can continue provide exceptional opportunities to our clients,” says Bailly. “Our L.A. expansion is one way to do just that. The barriers to entry are high, but hoteliers across the country are still eager to enter the market because of its metrics and the continued growth we expect in the future.”

The team is hitting the ground running and is looking to take advantage of the activity in the market. “We think there’s a huge opportunity in Southern California and across top West Coast markets, and we’ve been scouring for opportunities,” says Bailly. “Our team just closed a portfolio sale, which included a property in Arizona, for an institutional owner out of Texas and we will have some attractive opportunities coming the fall, so we’re very excited about what the future holds for the SoCal hotel market and the Berkadia Hotels & Hospitality team.”