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New AC Hotel in Park Place Opens, Sells for $53.7M

Irvine’s newest hotel, Park Place’s AC Hotel, has a per-room value topping some of the most established hotels in the area around John Wayne Airport, based on a reading of newly filed property records.

The 176-room AC Hotel Irvine, a new Marriott brand that targets “lifestyle” business and leisure travelers, opened last month with most rooms going for $150 to $215 per night, according to its website.

Woodbine Development Corp., a Dallas-based hotel developer with local operations in Los Angeles, built the seven-story property in a venture with USAA, a San Antonio-based financial services company.

Last June, Irvine-based Pacific Hospitality Group announced plans to buy the hotel from Woodbine and USAA upon the project’s completion.

A price wasn’t disclosed at the time.

Property records show the hotel sold in late March for a little under $53.7 million. That’s about $305,000 per room. Pacific Hospitality took out a $46.3 million mortgage with Texas-based American National Insurance Co. to finance the purchase, records show.

The per-room price exceeds that of two other well-known area hotels that sold recently, according to CoStar Group Inc. records: the Fairmont Newport Beach, now known as the Duke hotel, which sold in February for about $281,000 per room, and the Hilton Irvine, which sold in September for about $261,000 per room.

Other new hotels that recently sold include a Homewood Suites that’s part of the Vantis development in Aliso Viejo, which brought about $295,000 per room in early March.

Most of Pacific Hospitality’s hotels are high-end or boutique offerings in what the company describes as hard-to-enter markets.

It’s recently been investing in the new AC Hotel brand. Other buys include locations in New Orleans and Tempe, Ariz., the latter of which was also sold to Pacific Hospitality by Woodbine.

First OC Buy

Los Angeles-based apartment investor California Landmark Group has made its first Orange County acquisition for a rental property in Westminster within walking distance of Little Saigon.

It closed last month on The Windmill Apartments, a 186-unit complex about a mile from the San Diego (405) freeway and near the intersection of Brookhurst Street and McFadden Avenue.

The buyer, also known as CLG, paid $17.2 million for the leasehold interest in the complex, or roughly $92,500 per unit. It was sold by a Santa Ana entity operating as Belgrade Associates LP, according to property records.

One reason for the low per-unit price is that the entire property is encumbered by a ground lease and about 29 years remain on the term, with no extension options.

The “short ground lease term created an added challenge that we don’t normally see, but we’re excited we found a way to put this deal together and close within the required timeframe,” said CLG Vice President of Acquisitions Bo Drake in a statement.

Peter Gillin and Ken Morgan of Morgan Skenderian represented CLG and the seller in the deal, which was completed within 45 days of executing a purchase agreement, according to the buyer.

The complex was built in 1973 and has 22 separate buildings, plus a community center, swimming pool and spa, and two tennis courts. Monthly rents are about $1,500 for one-bedroom units, according to CoStar records.

Power Boost

Irvine’s 2211 Michelson office tower near the airport is getting an energy boost.

The 12-story building’s owner, Los Angeles-based Kilroy Realty Corp., said it will work with San Francisco-based Advanced Microgrid Solutions to roll out a hybrid electric building technology program at the 10-year-old property, plus four others it owns outside OC.

The battery-powered systems “will continuously optimize energy resources and automatically control costs by shifting the building to battery power based on price and demand response signals from Southern California Edison,” the companies said in a statement.

It’s a similar program to one AMS is working with Irvine Company on for a large number of the Newport Beach-based landlord’s local offices.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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