Hotel Sales: Hilton Costa Mesa Changes Hands for $70M
By SANDI CAIN
Despite a fourth quarter standstill in tourist-related industries, hotel sales in Orange County in 2001 kept pace with the previous year, with 28 transactions posted by year’s end. Those 28 sales totaled $142.1 million, almost double the $74 million posted from the same number of sales in 2000.
At the top end was the $70 million sale of the 484-room Hilton Costa Mesa. That sale, at $144,628 per room, was part of a four-hotel portfolio deal between Hilton Hotels and Orlando-based CNL Hospitality that gave the majority interest in the hotel to CNL. Hilton Hotels retains a minority interest in the Costa Mesa property.
The Hilton Costa Mesa ranked No. 11 on the most recent Business Journal list of the county’s largest hotels and No. 5 on the most recent list of largest meeting facilities. The Hilton has 46,000 square feet of meeting space.
But though the dollar volume of hotel deals in 2001 far exceeded the 2000 performance,which included few large sales,it still fell short of the $199 million posted in 36 transactions in 1999.
The top three sales in 2001 accounted for $96.5 million of the total. Another three,the Dana Point Inn & Suites, Days Inn Anaheim and Holiday Inn Placentia,accounted for $16 million. The remaining 22 sales,all for less than $5 million each,made up the remaining $29.6 million.
The second-biggest sale in 2001 was for the 70-room Inn at Laguna in Laguna Beach, which was acquired from an affiliate of UBS Warburg for $19.3 million by Classic Hotels & Resorts, an affiliate of Phoenix-based Grossman Co. Properties.
The independently owned 90-room Irvine Suites Hotel in Lake Forest ranked No. 3 in sale price in last year at $7.5 million. Architect George Lu sold the hotel to Keith Charlesworth’s Royal Motel Inc.
The median price per room for all 2001 sales in Orange County was $46,429, up from $41,741 the year before. But on a price-per-room basis, the highest price was paid for the beachfront Inn at Laguna, which went for $275,714 per room. The sellers, Chicago-based Coastal Hotel, had asked $21 million for the hotel. The Inn at Laguna, once a modest beachfront motel, was transformed in 1990 into its current boutique hotel format. About three-fourths of the rooms have ocean views.
The second-highest price-per-room was paid for the nine-room Rancho Bolsa Chica Inn, a bed and breakfast in Sunset Beach, which sold for $1.15 million, or $127,778 per room.
The oft-sold Ramada Santa Ana, on First Street near the Santa Ana (I-5) Freeway, brought in $2.4 million last year,at $16,438 per room, the lowest price per room among OC sales last year.
Of the 28 transactions in 2001, eight were in Anaheim and seven were in coastal cities with the others spread evenly between North and South County. All but eight properties sold had fewer than 100 rooms.
While the number of hotel deals in OC remained flat at 28 last year, in Los Angeles the number of sales dropped to 67 with $203 million in sales volume, down from 84 sales and $269.4 million in 2000. In San Diego, hotel sales increased to 46 from 31 the previous year. Those 46 sales totaled $451 million, compared to $172 million for the 31 sales in 2000.
Data source: Atlas Hospitality Group, Costa Mesa
