A 66-room hotel in Laguna Beach is set to change hands for $8.2 million after the note securing it was sold via an Internet auction last week.
The price comes to about $124,000 per room for the Laguna Brisas Spa Hotel at 1600 S. Coast Highway.
Hotel owner Laguna Brisas LLC filed for Chapter 11 bankruptcy in February 2012.
The hotel is affiliated with the Best Western chain and run by the Newport Beach-based Rim Hospitality division of Interstate Hotels & Resorts in Arlington, Va.
Bethesda, Md.-based commercial-backed mortgage securities servicer CW Capital sold a nearly $8.4 million loan on the hotel that carried a 6.33% interest rate.
The buyer’s name was not disclosed, and the purchase hasn’t officially closed.
The hotel is on a ground lease for the land owned by another company—which may have tamped down the bidding.
The land under the hotel is owned by a subsidiary of investor Tarsadia Investments LLC in Newport Beach (see related story on Indian-American community, page 1). The hotel has a $500,000-a-year ground lease with Tarsadia, according to Alan Reay, president of Irvine-based hospitality consultant Atlas Hospitality Group.
The hotel was billed as being 82% occupied with an average room rate of about $160.
Reay called it a “very, very good” property but noted that a ground lease—while not uncommon—can complicate a deal.
One local hotel operator who looked at bidding for Laguna Brisas took a pass because of the lease.
The operator said the hotel looked like a good buy and could become a boutique offering in what is a popular locale.
Reay brokered the sale of the land twice, including the deal with Tarsadia, but wasn’t involved in this transaction.
Irvine-based Auction.com handled the sale.
Executive Vice President Rick Sharga said the sale is expected to close within 30 days.
“The seller still has to approve it,” he said.
Auction.com has closed 98% of hospitality transactions done on its site since 2009 for nearly $1.3 billion.
It sold 30 hospitality properties worth more than $100 million this summer, he said.
The company sells commercial and residential real estate, most of it distressed.
About a third of the commercial properties on its site are not distressed assets Sharga said.
