The Irvine Marriott, the city’s second-largest hotel by room count, has quietly changed hands at a more than 33% premium to its last trade in 2015.
The 485-room property at the Irvine Towers office complex near John Wayne Airport sold for about $172 million, or $355,000 a key, according to sources familiar with the transaction.
It is the largest hotel sale of the year thus far in Orange County, although other blockbuster deals appear to be in the works (see story, page 7).
Quiet Buyer
Information is limited on the new owner of the 17-story property, which sits next to the San Diego (405) Freeway, off Von Karman Avenue. The hotel is the only building at the multi-tower complex not owned by Irvine Co.
Records list the buyer as Plaza Investment & Consultancy LLC, a new entity that state filings show to be based in La Jolla; its address there is the same as a law firm that handles real estate transactions.
The buyer, which took out a $113.8 million loan with Delphi CRE Funding of Larkspur to fund the deal, appears to have ownership ties to another entity based in Anaheim, Serenity Investment Holding & Consultancy LLC.
That group bought Anaheim’s 108-room Stanford Inn & Suites along Harbor Boulevard last year for about $17.6 million.
The Stanford Inn is the only other hotel property that the group is known to own. State records indicate that Serenity Investment is at the same address as a large tile distribution company based in Anaheim, Summit Tile.
The buyer couldn’t be reached for comment, and the seller of the hotel, CBRE Global Investors, a Los Angeles real estate investment manager that’s an offshoot of the commercial brokerage, declined to comment. Hotel officials also declined to comment.
CBRE Global paid $128.5 million for the property in 2015. It trails only Irvine Co.’s 536-room Hotel Irvine among the city’s largest hotels. The Irvine Marriott—OC’s 10th largest hotel by room count—also counts some 28,500 square feet of meeting space.
Property records indicate the hotel sold for $152 million, but Irvine-based Atlas Hospitality Group, a hospitality brokerage and consultancy, said that its data indicates the hotel traded hands at $172 million, when factoring in other assets of the hotel that sold. Other sources confirmed the higher figure.
The local portfolio for CBRE Global Investors and its affiliates are primarily offices. It paid $120 million early last year for 2600 Michelson, a 310,925-square-foot office tower a block away from the Marriott.
It also owns Stadium Tower in Anaheim, a 261,858-square-foot office tower on Katella Avenue that sold for $76.9 million in 2017.
Upgrades, Shower Doodles
The Irvine Marriott wrapped a $35 million renovation in 2017; upgrades were made to the front entry, lobby, guest rooms, gym, pool, and event space.
The property, which has a Starbucks and three other dining spaces on the ground floor, was built in 1983.
The site’s been used as a testing ground for new offerings from Marriott; in 2017 it got national headlines after trying out a shower door that could be used as a tablet for those doodling during bath time.
Last week, the hotel was being used by the Los Angeles Chargers for player and staff meetings, prior to the Costa Mesa team’s preseason game against Seattle Seahawks.
The hotel was part of a Marriott workers strike occurring across the nation in the past year. Unlike other Marriott locations, the Irvine property wasn’t unionized during the protests last winter, but has since voted to join Unite Here Local 11, according to news reports.
The unionization likely played a factor in the price paid by the new owner, sources tell the Business Journal.
OC Activity
The sale tops the Newport Beach Marriott Bayview’s $78 million sale, completed in July, as the most expensive hotel sale in OC this year. Clearview Hotel Capital LLC of Newport Beach bought that 254-unit property, just off Jamboree Road near the Back Bay.
The Irvine Marriott deal is also the priciest reported local hotel deal since the 2016 sale of the Ritz-Carlton Laguna Niguel, which sold for $317 million.
That property appears to be up for sale again, along with Montage Laguna Beach.
The two properties could bring in upward of $900 million if a deal with South Korean financial services group Mirae Asset Financial Group goes through.
The Business Journal reported last week that the two properties are among a dozen or so that Mirae plans to buy from troubled Chinese firm Anbang Insurance Group.
OC hotel deals in the second half of the year appear well on their way to top the cumulative sales totals of the first six months.
There were 11 local hotel sales through the first half, up 38% from a year ago, with sales volume jumping 50% to $228.9 million, according to Atlas Hospitality.
