The DoubleTree by Hilton Suites Anaheim Resort Convention Center—a 251-room hotel developed by Anaheim-based O’Connell Hotel Group—has sold for $62 million to a Newport Beach-based hospitality investor.
Records indicate an affiliate of MHG Capital has doubled its local holdings with last month’s purchase, which works out to about $247,000 per room.
On a total price basis, it’s the fourth-largest hotel sale in the past year for Orange County, and is the priciest for Anaheim since June 2021, when the Holiday Inn & Suites Anaheim Disneyland traded hands for $63.2 million.
O’Connell Hotel Group, headed by local hospitality veteran Bill O’Connell, delivered the hotel at 2085 S. Harbor Blvd. in 2006. It’s next to the Anaheim Convention Center and is less than a mile from Disneyland Resort.
The hospitality investor now counts five hotels in its local portfolio, including the JW Marriott, Anaheim Resort, a 466-room hotel near Anaheim GardenWalk that marked the first four diamond-level hotel in the city since 2001 when it opened in May 2020.
Growing OC Portfolio
It’s the second reported local holding for MHG Capital, which paid $34.2 million for the Four Points by Sheraton Anaheim in 2015. MHG owns seven hotels in total, now including nearly 500 rooms in Orange County.
The company got its start in 2012 and bought its first hotel in New Jersey, later expanding to markets in California and New York. It went public in 2015 with shares listed on the Taiwan Stock Exchange but was taken private in 2019 to launch a U.S.-based private capital arm, which operates locally out of 520 Newport Center Drive.
The company says it has invested more than $500 million in select and full-service hotels totaling more than 2,000 rooms over the past decade, and continues “to search for unique investment opportunities in prime urban locations.”
Other California holdings include the Hilton Garden Inn in San Diego and the Sheraton Sonoma Wine Country in Petaluma.
MHG funded its latest buy with a $40.3 million loan from Taiwan Cooperative Bank Ltd., property records indicate.
O’Connell’s hospitality history with Anaheim dates back to the 1960s when he was tapped by Al Stovall to head the family’s first hotel in the region, then called the Space Age Lodge. O’Connell became an official partner with the Stovalls in the 1970s and has since developed, co-owned, and operated eight properties in the Anaheim Resort.
The opening of the DoubleTree in Anaheim marked a milestone for O’Connell—he earned a Developer of the Year award from Hilton Hotels Corp. in 2004 for his efforts with partners from Orangewood LLC.
The full-service Anaheim hotel includes 7,500 square feet of meeting space and three restaurants: Agio Ristorante, Grappa Lounge and Café Biscoti.
Room rates for next month start around $150, according to the property’s website.
O’Connell proved his luxury chops during the pandemic when he developed the JW Marriott Anaheim. His development firm built the 12-story hotel with Orange-based Prospera Hotels, with a project cost of roughly $300 million. The 466-room Marriott was the largest hotel in California to open in 2020, and it is now the 17th-largest hotel in the county. Room rates there range from $250 to north of $400 for dates next month.
O’Connell Hotel Group and Prospera Hotel Inc.’s plans for development next to the GardenWalk shopping center once also included a proposal for a second hotel to run at least 350 rooms on Disney Way; the pandemic nixed those plans.
Orange County currently has five hotels with 811 rooms under construction, the largest being the 350-room Disney Vacation Club tower at Disneyland Hotel in Anaheim.
Orange County’s hotel market surpassed 2019 levels last year, with total revenue per available room up nearly 130% when compared to pre-pandemic levels, according to data from STR.
Anaheim’s recovery has somewhat lagged that of coastal markets in Orange County, though the city is expected to mark its full recovery this year. Occupancy rates across Anaheim hotels are currently hovering around 71%, slightly off from the 78% seen in 2019, according to Visit Anaheim.