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Wednesday, May 29, 2024

Pacifica Hotels Looks Local for Acquisition

Pacifica Hotels has the largest hotel portfolio by total properties—41—of any Orange County-based hotel operator.

Now the Aliso Viejo-based company, the largest owner and operator of independent hotels on the Pacific coast with about 4,200 rooms under its control, has a local asset as part of that collection.

The family-owned company last week said it bought Residence Inn by Marriott Anaheim Hills Yorba Linda, a 128-room select-service hotel—a type of property that often lack amenities seen at full-service hotels, such as an on-site restaurant. The hotel is next to the Anaheim Hills Festival Shopping Center, just off the Riverside (91) Freeway.

It’s the first Orange County property that Pacifica has owned in about five years.

It paid $25.5 million, about $200,000 a key, for the Anaheim hotel in a deal brokered by the San Diego office of HFF LP.

Property records indicate the seller was a unit of private equity giant Blackstone Group.

More acquisitions could be on the way, according to Pacifica’s Adam Marquis, who heads investment, operations and development projects for the company.

Pacifica is looking to boost the size of its portfolio to 75 hotels over the next decade, according to Marquis, who’s been with the company since 2010 and was promoted to president about a month ago.

He took over the role from his brother, Matt Marquis, who remains chief executive at the company.

Pacifica was created in 1995 as the hospitality arm of Santa Barbara-based Invest West Financial Corp., which Adam and Matt’s father, Dale Marquis, founded in 1970.

Other executives at Pacifica include Chris Marquis, another brother, who this month was promoted to executive vice president of acquisitions.

Pacifica reported 2018 revenue of about $220 million and employs 1,200 workers.

Acquisitions, Management

“It’s a stabilized operating asset in a central location that continues to see incoming corporate demand,” Adam said of the three-building Anaheim property, which runs about 94,000 square feet and includes a meeting room, pool and gym.

“It’s always good when we add a mainstay brand to our portfolio.”

Prior OC hotels under Pacifica’s control include the 36-room Laguna Cliffs Inn in Laguna Beach, which it sold in 2014.

Pacifica is not planning any physical upgrades to the Anaheim property, which underwent a $3.5 million renovation prior to the purchase.

It will instead “look to apply operational skills to maximize revenue and efficiencies,” Marquis said.

He added that the firm plans to focus on corporate accounts in the near-term, and bringing on more loyalty program customers to the property.

Select-service hotels like the Anaheim property make up a large portion of Pacifica’s portfolio, which spans California, Hawaii and Florida and includes 29 owned and 12 managed hotels.

Notable hotels in its portfolio include the La Jolla Cove Hotel & Suites in San Diego, Santa Monica’s Georgian Hotel, and a collection of boutique properties in the Central Coast town of Cambria, near Hearst Castle.

Pacifica’s plans for growing to 75 hotels include a mix of acquisitions, as well as more managed properties, Marquis said.

Much of the planned growth is centered on the company’s two independent hotel brands: Wayfarer and The Kinney.

The first Wayfarer hotel launched in 2014 and the second is currently in the works in downtown Los Angeles with the renovation of the city’s Milner Hotel.

The Wayfarer concept combines traditional hotel rooms with dorm-style guest rooms and communal amenities.

The Kinney brand is what Marquis describes as an added-value concept that is implemented to certain select-service hotels in the company’s existing portfolio after a renovation.

Marquis told the Business Journal that the company doesn’t have clear plans to purchase more assets in Orange County, but it will continue to “wait for the right timing in the market cycle and look for assets that are underperforming, or ill-positioned in their respective locations, where we can apply our added-value and operational expertise.”

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