The Newport Beach Marriott Bayview has been sold to a local investor, in the priciest hotel transaction seen in Orange County in nearly a year.
Newport Beach-based Clearview Hotel Capital LLC, a privately held hotel investment and advisory company that buys, renovates and runs hotels in urban and unique locations, recently completed the purchase of the 254-room Marriott, which sits at the tip of the city’s Back Bay, just off Jamboree Road.
Property records indicate that an affiliate of Clearview paid $78 million, or $307,000 per room, for the 31-year-old hotel, which is located on about 5 acres and is next to the 100 Bayview office complex.
The nine-story, full-service property has about 4,000 square feet of meeting space, and was last renovated about a decade ago, brokerage data shows.
The Bayview property was sold by Bethesda, Md.-based Host Hotels & Resorts Inc. (NYSE: HST), which had owned it since 1988.
The buyers got a $52.5 million loan from Bank of America to fund the deal, which was brokered by Eastdil Secured LLC, records indicate.
1st Local Buy
It’s the first local acquisition for Clearview, which was formed in 2007; over the past dozen years it has acquired close to $2 billion of hotels containing over 10,000 rooms, according to its website.
Clearview indicates it currently has 13 additional hotels in its portfolio. West Coast holdings include a pair of properties in Old Town San Diego, and one in Honolulu.
Its best-known property is the 1,107-room Washington Hilton, the site of the attempted assassination of former President Ronald Reagan in 1981. That hotel, which it bought in 2016 in a venture with Los Angeles-based Oaktree Capital Management LP, obtained a $225 million refinancing earlier this year, according to news reports.
The company appears to be on a recent acquisition push in Southern California, according to data from Irvine hotel brokerage and consultancy Atlas Hospitality Group.
In April, it paid $27 million for the Westin Mission Hills Resort, a 512-room property in the Coachella Valley, according to Atlas Hospitality data. That property also was sold by Host Hotels.
Others in OC
Host Hotels has yet to confirm the Newport Beach sale. Company officials with the $13.3 billion-valued REIT said during an analyst call in May that it was working on a pair of dispositions, but didn’t disclose their locations.
“We will be opportunistic in taking assets to market, responding to unsolicited offers,” said James Risoleo, Host’s president and chief executive.
Host currently has three other Orange County hotels in its portfolio; the 532-room Newport Beach Marriott Hotel & Spa, Costa Mesa’s 393-room Westin South Coast Plaza and the Costa Mesa Marriott, which has 253 rooms.
There’s been no indication it is looking to shed its other area assets.
Sunstone Ties
Jon Kline, Clearview’s chairman and chief executive, served as president at then-San Clemente-based hotel owner Sunstone Hotel Investors Inc.
Sunstone (NYSE: SHO) is now based in Irvine and has a $3 billion market cap. Prior to joining Sunstone in 2003, Kline directed the U.S. hospitality and leisure investment banking practice at Merrill Lynch, with responsibilities including lodging, gaming and restaurants.
Kline left Sunstone in 2007 to start Clearview. In 2010, Clearview filed paperwork to take the company public and sought to raise about $375 million. Those plans were soon scrapped amid a tough market for new listings.
In addition to its core investment and operating businesses, the firm also runs Dolphin Hotel Management, a hotel management business.
Kline is also on the board of directors at San Clemente’s CareTrust REIT Inc. (Nasdaq: CTRE), which has a market cap of $2.3 billion, an affiliate of Newport Beach’s KBS Realty Advisors.
CEO: Upgrades in Store for Marriott
Clearview Hotel Capital LLC typically invests in short-term holdings, but that’s not the case for its new asset, Newport Beach Marriott Bayview, its first in Orange County.
“We haven’t been able to find properties in Orange County at a price we like, and this property is in a great long-term market with limited direct competition,” Chief Executive Jon Kline told the Business Journal last week.
“We typically buy hotels, invest in them and then sell, but we plan on holding this property for the long term.”
A large renovation is on the way for the 31-year-old property that hasn’t seen a significant upgrade in a decade. This includes revamped rooms, amenities, and perhaps a rooftop restaurant.
“We want to emphasize that this is an all-suite hotel, and encourage longer-term customers to stay with us,” Kline said. He declined to say how much the company plans to spend on the project.
In addition to including amenities such as in-suite kitchens and outdoor event spaces, Clearview is keeping the pervasive wellness trend in mind, and plans to add Peloton bikes to some of the suites.
The hotel will keep the same name, and continue to be managed by Marriott International Inc., a frequent Clearview partner.
The estimated renovation will start this winter.
Future hotels in Orange County may or may not be in the cards.
“Our acquisitions are opportunistic in nature,” Kline said.
— Katie Murar
OC’s Home of Hotel Sales
With the recent sale of the Newport Beach Marriott Bayview, there’s been three outright sales of Orange County hotels since the start of 2017 that have topped $75 million.
Each of those was in Newport Beach, according to data from real estate market tracker CoStar Group Inc.
The largest of the three took place in 2017, when Sunstone Hotel Investors sold the 444-room Fairmont Newport Beach hotel along MacArthur Boulevard.
A China-backed entity affiliated with Infinity Realty Advisors in Los Angeles bought the hotel for about $125 million, or $282,000 per room, which now operates under the Renaissance Newport Beach Hotel name.
Last summer, Sunstone—the largest owner of hotels based in OC—sold its only remaining local property, the 408-room Hyatt Regency Newport Beach along Jamboree Road.
That property, subject to a land lease, sold for $95 million, or roughly $233,000 per room. Its new owner, L.A.-based Woodridge Capital Partners LLC, is said to be considering a major renovation of the property.
— Mark Mueller
