Bethesda-based hotel operator RLJ Lodging Trust has snapped up a hotel in Irvine, its second local acquisition this year.
RLJ, a real estate investment trust that owns 148 hotels in the U.S., bought the 293-room Embassy Suites Irvine Orange County late last month. The sale was part of a two-hotel, $120 million deal with Cornerstone Real Estate Advisers Inc. of Hartford, Conn.
The Irvine hotel was valued in the deal at about $225,000 per room, or $66 million, according to Alan Reay, president of Irvine-based consultancy Atlas Hospitality Group. The other hotel Cornerstone sold to RLJ was in Portland, Ore.
The $120 million purchase price for the two hotels represents a forward capitalization rate of about 7.4% on their combined projected 2015 net operating income, according to RLJ, which used cash and $88.5 million drawn from a credit facility to fund the purchase.
Denver-based Sage Hospitality was awarded the management contracts for both hotels.
The Irvine transaction is the second priciest hotel sale in Orange County since the start of this year, trailing only last month’s sale of the St. Regis Monarch Beach in Dana Point. The St. Regis was bought by Denver-based private equity firm KSL Capital Partners for an estimated $320 million.
The Embassy Suites Irvine is a few blocks from John Wayne Airport, near the intersection of Main Street and Von Karman Avenue. It draws a mix of business and leisure guests, according to the buyer.
The deal marks the second in OC for RLJ in recent months.
In March, it completed the acquisition of a portfolio of 10 Hyatt-branded hotels totaling 1,560 rooms that it bought for $312.5 million, or roughly $200,000 per room.
That deal included the 142-room Hyatt House Cypress/Anaheim just off Cerritos Avenue in Cypress.
The two recent acquisitions are the only OC hotels in RLJ’s portfolio. It owned five properties in California at the start of the year.
“With the acquisition of these two hotels, we continue to expand our West Coast presence and upgrade our portfolio’s overall quality,” Chief Executive Thomas Baltimore Jr. said at the time of the Irvine and Portland acquisitions.
GardenWalk Gain
The Anaheim GardenWalk has announced its largest lease since the struggling mall had a change in ownership in 2012.
The mall, down the street from Disneyland and the Anaheim Convention Center, recently signed Toby Keith’s I Love This Bar & Grill, a dining and entertainment venue, to a 20,000-square-foot lease.
The location, the second in California and the first in OC for the country music bar and grill chain, should open this year, according to GardenWalk officials.
“Anaheim is a destination for many, and these country music fans will now have a perfect location, said Frank Capri, chief executive of Boomtown Entertainment, the Phoenix-based owner-operator of the chain, which has 16 locations across the country.
The plan is to bring in national and regional artists for nightly entertainment at the venue, officials said.
The GardenWalk was sold to New York-based investment firms Arcturus Group LLC, Avenue Capital Management and Elliott Management Corp. in 2012 for a reported $73 million.
The 466,417-square-foot center opened in 2008 but has struggled to gain traction with tenants. It’s now about 44% leased, according to CoStar Group Inc. data.
