Hotel sales in Orange County picked up pace in the first half of 2006, rebounding from falling sales a year earlier.
Seventeen hotels traded hands in the first half, a 13% rise from 2005. Fifteen hotels sold in the first half of 2005, down from 19 in 2004.
The value of the deals jumped 629% to $569 million, thanks to the blockbuster sale of the Ritz-Carlton Laguna Niguel for $330 million, according to a survey by Irvine’s Atlas Hospitality Group.
The Ritz-Carlton deal was the biggest in Southern California in the first half. Without it, the value of local hotel sales rose 205% to $238 million.
Orange County’s number of hotel deals ranked it No. 3 in Southern California.
Los Angeles County deals put it at No. 1 with 47 hotels trading hands, a 15% increase from a year earlier. San Diego County had 18 hotel sales, a 12.5% increase. San Bernardino County saw its sales number increase 60%, with eight hotels changing hands.
Only Riverside County saw less activity than in the first half of 2005. The number of sales there fell 39% to 14.
Top Deals
OC’s second-largest sale in the first half of the year was the 293-room Embassy Suites Irvine.
The business hotel was sold to HEI Hospitality LLC of Norwalk, Conn., for $55 million.
It ranked No. 34 among OC’s largest hotels by rooms, according to the most recent Business Journal list.
The third-biggest sale in OC was the 238-room Wyndham Orange County Hotel in Costa Mesa, which was bought by Newport Beach-based Makar Properties LLC through an affiliated venture for $42 million.
The Wyndham, across the street from the new Ren & #233;e and Henry Segerstrom Concert Hall, completed a renovation of its rooms, entry, lobby and restaurant in October.
Makar also owns the St. Regis Monarch Beach Resort & Spa and is building Pacific City, a hotel, shops and homes project, in Huntington Beach.
Rounding out the top five: the 130-unit Vacation Village in Laguna Beach, which sold for $43 million, and the Crowne Plaza Irvine, which sold for $24.1 million.
Vacation Village, a seven-building complex on 4 acres with a 300-foot beachfront near downtown Laguna, was acquired by Westport, Conn.-based Westport Capital Partners LLC.
The Crowne Plaza Irvine was part of a sale of several hotels by Irving, Texas-based FelCor Lodging Trust Inc. to Newton, Mass.-based Hospitality Properties Trust.
It ranked No. 27 among the county’s largest hotels on the Business Journal’s list.
The Westin South Coast Plaza, No. 20 on our list, was part of a portfolio of hotels bought by Marriot Host Hotels & Resorts Inc. from Pittsburgh-based Secon Properties.
Other local sales: the Hampton Inn & Suites and La Quinta Inn on Hotel Circle in Santa Ana; Quality Inn Buena Park; and La Quinta Inn Anaheim.
OC had the highest average price per room at $163,211, up 96% from a year ago,again thanks to Ritz-Carlton, which sold at $839,695 per room.
The median price per room in Orange County was $86,585, slightly up 1% from 2005.
San Diego saw the highest median price per room at $157,459, up 58% from last year.
A healthy hotel market,income surpassing the cost of financing,is driving sales, Atlas Hospitality President Alan Reay said.
“We believe the year end will be very strong,” he said.
The sales pace likely is to continue into next year, with smaller hotels and motels seeing the most activity, Reay said.
“About 70% of our sales are $5 million or below” he said.
That benchmark price could rise as hotel values increase, according to Reay.
The Ritz-Carlton Laguna Niguel sale far outpaced the largest sales in neighboring counties.
The hotel was sold by Chicago’s Strategic Hotel Capital LLC to Strategic Hotels and Resorts Inc., a related real estate investment trust.
The Ritz-Carlton completed a $40 million renovation last year and recently earned another five-diamond rating from AAA and a four-star rating from Mobil Travel Guide for 2007.
Brisk Sales
OC sales have remained brisk since July.
The former Holiday Inn in Anaheim at Ball Road and Harbor Boulevard sold for $22.5 million this summer. Laguna Beach-based Casa Resorts Inc. bought the 255-room hotel from Kam Sang Properties.
The hotel was putting finishing touches on a remodel, transforming it into a boutique hotel.
It has been remodeled into what partners Richard Ham and Chris Keller hope will provide a hip and cool setting.
The owners made several changes, including renaming it Hotel Menage, changing the color scheme, adding scents and enlarging the bar area to promote relaxation. They also plan to add a pool deck, cabanas and VIP areas at the poolside bar.
Casa Resorts Inc. also owns La Casa Del Camino Hotel in Laguna Beach.
In July, the 199-room Embassy Suites Buena Park was sold for $18.5 million to Grand Mission LLC by Robert Dollar Co.
