The new owners of a boutique hotel in Laguna Beach that traded hands this summer are hoping to give the just-upgraded and rebranded property’s occupancy rates a boost, despite the loss of some Real Housewives of Orange County star power.
The principals of Newport Beach-based Marshall Property & Development LLC recently completed the purchase of the InVogue Hotel, a 14-unit hotel near the intersection of Coast Highway and Cleo Street, about a third of a mile south of downtown Laguna Beach. The 7,040-square-foot property, which counts about 1,800 square feet of retail space on the ground floor, sold for a little more than $5.5 million, or roughly $400,000 per room.
The property, located at 690 S. Coast Highway, was listed for sale at $6.8 million and had been on and off the market for at least a year, according to brokerage data.
Property records show The Lofts at Laguna Beach LLC, a San Clemente-based entity whose ownership group includes realty television star Alexis Bellino and her husband Jim, sold the property. Alexis Bellino, a star of the past few seasons of Bravo TV’s Real Housewives of Orange County, was listed as a manager of the LLC.
Name Change
The two-story hotel has been upgraded and rebranded since the sale. It recently began operating under the 14 West name.
Each of the property’s 14 rooms has its own theme—rooms are named and designed after different Southern California beach towns—and rooms include small kitchen areas and high-end bathrooms, among other amenities.
The property is being marketed to users seeking an extended stay, corporate housing, private events or a beach vacation.
The deal is the first-ever hotel purchase for Marshall Property’s principals, Paul Marshall and Matt Montgomery, since the two started up their real estate investment and development company about three years ago. The two previously ran the Irvine office of Phoenix-based developer Opus West Corp., handling the company’s Southern California operations.
Opus built a trio of high-rise Irvine condos a few years ago at Jamboree Road and Campus Drive, near the city’s boundary with Newport Beach, along with the 2050 Main Steet tower in the Irvine Concourse office campus.
Marshall and Montgomery started their new venture in 2009 as Opus West fell into bankruptcy.
The 14 West deal—which was bought under the M2 Coastal LLC name—is “a little bit out of our core business, but it was a great opportunity to invest in a local business,” Marshall said.
The company also has been looking at office and mixed-use investments in Southern California and Arizona.
The goal with the hotel investment is “to create a boutique experience with great value and location—something you don’t run across very often while traveling Southern California,” Montgomery said.
Rates at the hotel are currently running from about $150 to $200 a night, according to the property’s new website.
Occupancy Rates
The short-term goal for the property’s owners is to increase occupancy rates, which had suffered the past few years amid ownership issues.
The Bellinos and their partners reportedly had lent more than $2 million to prior owners of the property and foreclosed on the hotel in 2009. Subsequent lawsuits kept the property in limbo for nearly two years.
Occupancy rates were running about 60% at the time of the latest sale, and the new owners hope to boost that to 90%.
Montgomery said the investment yields for the deal are more attractive than for typical coastal properties, with the upside hinging on improving occupancy rates rather than rental rates. He said the Bellinos, who recently invested in an Anaheim trampoline park, never intended to own the hotel for long and began marketing the property for sale soon after taking ownership.
