An investment group that recently bought the Hilton Irvine/Orange County Airport hotel on behalf of clients in China is close to making another big hotel purchase near the airport, according to hospitality industry sources.
Buzz coming from last week’s Americas Lodging Investment Summit in Los Angeles centered on Infinity Realty Advisors as the likely buyer of the Fairmont Newport Beach, a 444-room hotel a few blocks from John Wayne Airport on MacArthur Boulevard.
Infinity Realty is a Los Angeles-based real estate investor that buys U.S. properties on behalf of clients in mainland China.
The Fairmont will trade hands for more than $100 million, or in excess of $225,000 per room, according to knowledgeable sources attending last week’s ALIS conference, which was co-hosted by Costa Mesa-based Burba Hotel Network.
Infinity Realty last week declined to comment on the rumored transaction.
Infinity Realty’s website reports that the company has spent $2 billion on real estate transactions, with a recent eye on OC-based hospitality assets.
Last September it headed up the reported $80 million buy of the Hilton Irvine, a 306-room property across the street from the airport on MacArthur Boulevard.
That was the priciest buy of an individual hotel property in Orange County last year—a year that also saw the glitzy Ritz-Carlton Laguna Niguel and Montage Laguna Beach sell in a massive portfolio deal—according to CoStar Group Inc. records.
Other recent deals in the region involving Infinity Realty include last year’s $52 million buy of the 405-room Holiday Inn near Los Angeles International Airport.
Sunstone Asset
Fairmont Newport Beach is owned by Aliso Viejo-based Sunstone Hotel Investors Inc.
The publicly traded real estate investment trust bought it in 2005 in a reported $72 million deal that included a ground lease. In 2014, it paid an additional $11 million to acquire the 7.3 acres the hotel sits on.
Sunstone executives said at the time of the 2014 deal that owning the property and the land outright could make the Fairmont a more attractive acquisition candidate in the not-too-distant future.
Sunstone’s latest annual report said it has spent more than $34 million on upgrades to the property—currently the only Fairmont property in its 28-hotel portfolio.
As of last July, Sunstone’s management agreement with Fairmont was terminable upon sale of the hotel with 60 days advance notice to Fairmont; and as of last September, the management agreement was terminable for any reason upon 60 days, according to the company’s last annual report.
The Fairmont is one of two Orange County hotels that Sunstone owns, along with the Hyatt Regency Newport Beach.
