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Wednesday, Dec 6, 2023

San Manuel Tribe Buys 40% Stake in Revamped Waldorf Astoria, at Estimated $600M Valuation

Dana Point’s Waldorf Astoria Monarch Beach Resort & Club has seen a shake-up in its ownership structure, with the San Manuel Band of Mission Indians (SMBMI) making what appears to be its largest-ever investment in a non-casino property.

San Manuel, an indigenous tribe located in the San Bernardino region, bought a 40% stake in the 400-room property, one of the higher-end resorts in Orange County, from Redwood City-based Ohana Real Estate Investors LLC.

Terms of the deal were undisclosed.

Ohana paid nearly $500 million for the 175-acre property in 2019. It was the largest-ever hotel sale in Orange County at the time.

Alan Reay, the head of Irvine-based hotel consultancy and brokerage Atlas Hospitality Group, pegged the Waldorf’s current value around $600 million, factoring in the improving market for high-end, coastal properties of late.

That estimated price, factoring in a price of around $1.5 million a key, would represent a nearly $240 million investment by SMBMI, which operates Highland’s Yaamava’ Resort & Casino at San Manuel and the roughly 50-acre San Manuel Landing logistics facility in San Bernardino, in addition to other hotels and office properties.

San Manuel has the option to increase its stake in the Waldorf Astoria in the future, it said.

“Investing in a luxury destination resort such as Waldorf Astoria Monarch Beach represents another milestone for our tribe, enabling us to continue executing our long-term diversification strategy,” SMBMI Chairwoman Lynn Valbuena said in a statement.
It’s the tribe’s first reported investment in Orange County.

“This opportunity enables us to get to know the region, which will be key for the ongoing success of the property,” Valbuena told the Business Journal.

Recent Changes

Ohana, initially backed by eBay Inc. founder Pierre Omidyar and now with an investor base that includes university endowments, foundations, and family offices, has owned other luxury resorts in OC; it previously owned the Montage Laguna Beach between 2009 and 2015.

Ohana’s 2019 buy of the 175-acre Waldorf Astoria resort came when it was known as the Monarch Beach Resort. Prior to that, it operated under the St. Regis name.

The property, the county’s 18th largest hotel by room count, was rebranded into OC’s first Waldorf Astoria, Hilton’s luxury flag, in January 2021, amid a major renovation push. The resort completed a $30 million renovation of its guest rooms’ design and suite sizes last year. Starting rates are currently between $820 for a weekday and $995 for a weekend stay.

“We are excited to partner with Ohana Real Estate Investors and impressed with Hilton and Waldorf Astoria’s strategic repositioning of the property over recent years,” Valbuena said.

It’s not the largest purchase for SMBMI. In 2021, it paid a reported $650 million for the Palms Casino Resort in Las Vegas. It became the first Native American owner and operator of a casino resort in Las Vegas with that deal.

The new ownership group sees synergy between its casinos and the Dana Point resort.

“The stunning coastal setting, along with its exceptional guest service and amenities, are features that our Yaamava’ and Palms guests will enjoy,” Valbuena said of the Waldorf Astoria investment.

An affiliate of SMBMI bought the 777-room Palms from Station Casinos, which is run by billionaire Frank Fertitta, who counts ties to OC via several high-end coastal homes.

Another billionaire member of the Fertitta family, Houston Rockets owner Tilman Fertitta, last year paid almost $650 million for the 259-room oceanfront Montage Laguna Beach resort, which set a new record for an area resort sale at nearly $2.5 million a key.

New Investor

SMBMI said their association with the resort came from previous partnerships on various philanthropic efforts in the past.

The local investment is part of the group’s development strategy to build infrastructure that benefits and supports the tribe.

“We are fortunate to have the opportunity to expand our portfolio of investments that will ensure continued growth for our tribe for the next seven generations,” Valbuena said. “This recent acquisition of partial ownership interest fits with the tribe’s hospitality acumen and business knowledge and extends our existing portfolio.”

SMBMI and its affiliates hold ownership interest in six hotel properties adding up to approximately 2,000 keys, according to group officials.

Other hospitality ventures it owns include Highland’s Bear Springs Hotel. SMBMI are partial owners of The Draftsman hotel in Charlottesville, Va., Residence Inn Sacramento and the

Residence Inn National Mall in Washington, D.C. The latter 233-room hotel was a $43 million project that opened in 2005 in partnership with three other tribes who manage the property under the name Four Fires.

The local Waldorf Astoria has 110,000 square feet of meeting and event space with 16 bookable rooms. It ranks as the fifth largest amount of hotel meeting space in OC, according to Business Journal data. It has a spa, golf course, and several high-end restaurants.

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.

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