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Thursday, Feb 13, 2025
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The Montage Club

As it reaches the 20-year mark of operations, Irvine-based Montage International continues to draw visitors and investors alike to its collection of 14 luxury properties, with over 3,000 rooms across the U.S. and Mexico.

Nowhere is that more clear than at its flagship location in Laguna Beach, which sold
in November for $641 million, or nearly $2.5 million per key, setting several local marks.

The price paid by billionaire Tilman Fertitta for the 259-room Montage Laguna Beach was the most ever paid for a hotel in Orange County, and was the second priciest on record for the state, on a total and per-room basis.

The Montage sale was the biggest single-property commercial sale in Orange County for the year; those deals are highlighted in this week’s Top Deals of 2022 Special Report.

“The deal was a terrific boost of confidence,” founder and Chief Executive Alan Fuerstman told the Business Journal. “We have a great owner that is focused on the stewardship of the property and committed to investing and supporting efforts to innovate and provide extraordinary experiences for guests.”

More’s in store going forward for the company, which continues to expand with new developments and an emerging offshoot set to debut in OC later this year.

“[Laguna Beach] was the first opportunity we had to plant the flag, create the brand and become the platform for all Montage hotels,” Fuerstman told the Business Journal.

Where it’s Going

The high-end hotel operator will open four new hotels in the next three years, starting with the Pendry Newport Beach this summer.

Taking the spot of the former Fashion Island Hotel, it will be the first Pendry for OC, and the eighth in the company’s portfolio.

Next year, Montage will open the Montage Cay in the Bahamas, building on the company’s international portfolio that kicked off with the 2018 opening of Montage Los Cabos in Mexico.

The firm has signed 11 new management contracts in the past year with a growing focus on Mexico, and new sights set on the Caribbean.

“Just going to a [new] market is not enough—being in the right location of any particular market is incredibly important,” Fuerstman said. “We’re as much defined by the deals we turn down as by the deals we actually do.”

It’s part of the brand consistency Fuerstman hopes to set up across the portfolio, starting with a focus on Montage’s “own backyard.”

“If we do a great job with that, our reputation will spread and become well known regionally, nationally, and ultimately internationally,” he said.

The opening of Pendry Newport Beach marks “an exciting and dynamic time” for the company, according to Fuerstman.

“It is a hotel that will be truly of Newport Beach and a remarkable addition to the community.”

The nearly 300-room property will bring Montage’s newest offerings in the luxury segment with a focus on food and beverage offerings and a unique membership-based social club.

The Pendry company, co-led by Fuerstman’s son, Michael Fuerstman, as the creative director, is a spinoff boutique brand that skews a bit younger in terms of market share; the social club is a first step in bringing those modern offerings to OC.

Where it Started

Montage will continue to focus on its first Orange County property, which wrapped an extensive resort-wide renovation in 2019.

“Investment will continue to keep the hotel at the top of the luxury hotel market,” Fuerstman said.

A new dining concept will open this year in the current Studio restaurant, which is currently used for private events.

Prior upgrades included new guest rooms and suites and interior design updates to its public spaces and meeting rooms, spanning 33,500 square feet, to match the surrounding oceanfront.

“This is home, and this is where we get to showcase our heritage, and where we started it all,” Fuerstman added.

Brand Power

A recent vote of confidence from a fellow local hospitality operator provides proof to the brand’s power in the industry.

Nearly two years ago, hospitality real estate investment trust Sunstone Hotel Investors (NYSE: SHO) paid $265 million for the 130-room Montage Healdsburg in Sonoma County.

That investment has paid off, with a recent surge in group business providing a boost to Sunstone’s bottom line heading into 2023, according to the firm’s fourth quarter earnings.

“As of the start of the year, Montage has nearly twice the amount of group revenue on the books for 2023 than it had as of the start of last year,” Chief Executive Bryan Giglia said during an earnings call with analysts last month.

The company—which recently relocated its headquarters to Aliso Viejo (see story, page 3)—paid a little more than $2 million per key in April 2021 for the hotel, which opened at the end of 2020 under a long-term management contract with Montage International.

Affiliates of Ohana Real Estate Investors, which owns Dana Point’s Waldorf Astoria and has owned other high-end hotel properties in Orange County, sold the Montage Healdsburg. It was Sunstone’s first acquisition since 2017.

Later in 2021, Sunstone added to its wine country portfolio with its $177.5 million purchase of The Four Seasons Resort and Residences Napa Valley in Calistoga.
Group bookings for that property are up 80% year-over-year, Giglia said.

“These were two brand-new luxury hotels that opened up into a fantastic leisure compression market and then [had] to readjust their models to bring in the right mix,” Giglia said.

“Overall, we are pleased with the types of events these properties are now attracting as they continue to ramp up.”

The REIT, which counts a $2.3 billion valuation, has 15 hotels in its portfolio.

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