Orange County hotel sales inched higher in 2004 for the first time since 1999.
Overall, 30 hotels changed hands last year, versus 28 a year earlier.
While the increase in the number of sales was slight, the top two sales alone totaled $173.5 million, exceeding the total sales for all of 2003 by $20.5 million, according to data supplied by Costa Mesa-based Atlas Hospitality Group.
Topping the list was the 489-room Irvine Marriott, which Cigna Hotel Associates I LLC sold for $92.5 million to MeriStar Hospitality Corp., an Arlington, Va.-based real estate investment trust. Cigna Real Estate Investors of Hartford, Conn., was the managing partner of Cigna Hotel Associates.
MeriStar owns 79 hotels in 23 states and Washington, D.C.
At the time of the sale, MeriStar Chief Executive Paul Whetsell cited an improving business travel market, higher room rates and operating margins at the company’s similar hotels as reason for the buy. A $7.5 million room renovation recently was completed.
The second-largest sale in OC was the 654-room Hyatt Regency Orange County in Garden Grove near the Anaheim Convention Center.
Newport Beach-based Tarsadia Hotels sold the Hyatt to Ashford Hospitality Trust, a Dallas-based real estate investment trust.
There were 20 bidders for the Hyatt, according to industry publication Hotel Journal. That marks an uptick in interest from potential buyers for large hotels in strong markets.
The Hyatt ranked No. 5 on the most recent list of OC’s largest hotels and holds the No. 3 spot among the county’s largest hotels ranked by meeting space. The Hyatt has 63,754 square feet of indoor meeting space.
The hotel underwent a total renovation and expansion under Tarsadia ownership, doubling its room count and meeting space in mid-2001.
Rounding out the top five sales in 2004 were the Doubletree Anaheim/Orange County in Orange, the Sutton Place in Newport Beach and the Fullerton Marriott.
Sales prices for the Doubletree and Sutton Place were not disclosed, but were estimated to be in the $35 million to $40 million range by the Business Journal.
The Doubletree was sold to Slohat Hotels LP, a venture of San Antonio-based USAA Real Estate Co. and Hilton Hotels Corp. of Beverly Hills.
The deal was part of a six-hotel portfolio sale by Dallas-based Wyndham Hotels International. A $6 million renovation was completed last year.
After selling the Hyatt, Tarsadia bought the 435-room Sutton Place from Stanley Ho of Hong Kong, best known as the gambling czar of Macau Island off the coast of China.
Ho also is president of Sutton Place Grande Hotels and owns a home in Newport Coast.
The Hyatt sits on leased land on MacArthur Boulevard at Koll Center Newport. MacArthur 4500 LLC, an investment group that includes Lee Sammis Associates in Costa Mesa, owns the parcel.
Tarsadia declined to comment on either the sale of the Hyatt Orange County or the acquisition of Sutton Place.
Meanwhile, the 225-room Fullerton Marriott at California State University, Fullerton, traded hands for $11.9 million as part of a $70 million, five-hotel portfolio sale by Host Marriott Corp. of Bethesda, Md.
The buyer was a joint venture group comprised of HEI Hospitality and Greenfield Partners LLC, both of Norwalk, Conn., and GIC Real Estate Pte Ltd, the real estate investment arm of the Government of Singapore Investment Corp.
In all, the top five sales totaled more than $250 million.
The uptick in higher-end property sales is an indication that the market is catching up with expected sales prices, said Alan Reay, Atlas president.
“There’s sentiment (in the industry) that the recession is over,” Reay said. “I see this sales pace continuing for the next two years.”
