Oakland's only boutique hotel is closing its doors after only a few years in business.
The Moxy, widely known for the prominent hot pink neon sign that looks out over the corner of West Grand and Telegraph avenues, has closed its bar and appears to have stopped accepting reservations.
The shuttering of the 172-room Marriott-branded hotel comes on the heels of a string of hotel closures in Oakland and elsewhere in the Bay Area, where the hospitality market has been hit especially hard since the onset of the COVID-19 pandemic. The Moxy, with its mid-century-style hipster furniture and free cocktails for guests at check-in, opened in 2019 at the height of the Bay Area's last tech boom.
With outlets from New York City's East Village to Tokyo, Moxy Hotels is aimed at younger, urban travelers with relatively cheap room rates and cheeky design elements for a Marriott hotel.
But that was apparently not enough to overcome a confluence of factors that hit Oakland's hospitality market, including inflation, the rise of short-term rentals like Airbnb and increasing concerns about crime that kept tourists away, in addition to the effects of the pandemic.
The hotel defaulted on a $35 million loan from Acore Capital Mortgage in August. It refinanced in 2022. In September, a court appointed a receiver to manage the property, and a couple of months later, the tax collector issued a lien for nearly $102,000 in unpaid property taxes, according to the Standard.
Calls to the management by CoStar News were not immediately returned. The hotel is no longer accepting online or phone reservations.
Oakland's hotel distress
Until recently, San Francisco was the least recovered market in the country in terms of hotel demand, though that is expected to change dramatically as the Bay Area is set to host a bevy of major sports events in 2026. San Francisco is projected to see room rates rise 37% year over year, fueling a 47% boost in revenue per available room, or RevPAR, as the city prepares to host the Super Bowl next month.
Oakland so far has yet to share in that recovery.
Last February, the 500-room Oakland Marriott City Center hotel defaulted on a loan from Invesco CMI Investments, which had bought the debt the previous spring. Creditor Invesco Real Estate purchased the downtown hotel at a foreclosure auction for about half the price it had sold for back in 2017, while workers at the hotel protested last fall over stalled contract negotiations.
Other notable establishments to fall into financial distress include Oakland’s quirky Waterfront Hotel, a 145-room nautical-themed establishment in Jack London Square that had been a fixture of the East Bay waterfront for decades. It closed last year after the owner reportedly stopped paying rent. The sprawling Oakland Hilton Hotel near Oakland International Airport closed its doors, citing declining business and rising crime.
In late December, a group of local investors bought the 156-room Courtyard by Marriott Oakland Airport hotel for just $12.5 million, well below the property’s assessed value.
Preparing for a comeback
San Francisco real estate development firm Tidewater Capital and hotel management firm Graves Hospitality were behind the Moxy in Oakland, aiming to capitalize on the pre-pandemic boom in construction in the Bay Area's second city, as residents and businesses migrated across the bridge from San Francisco in search of cheaper rents.
A glut of shiny new high-rise apartment buildings that were planned when Oakland seemed on the verge of a San Francisco-like tech boom came online a few years later into a very different market, and high supply and low demand pushed rents downward.
Adjusted for inflation, RevPAR in the Oakland/Berkeley/Hayward hospitality market is estimated to be nearly 40% below 2019 levels, underscoring the depth of the real recovery gap.
"Concerns around crime, a persistently weak office environment, and the departure of three major professional sports teams have weighed on visitation and group demand, particularly midweek," according to a CoStar market report. "On the other hand, performance is projected to stabilize and return to growth in 2027 and beyond, driven by gradual improvements in occupancy, steadier group demand, and a normalization of supply–demand conditions."