The hospitality transaction market has been busy in the last week as more than $500 million in assets have changed hands, including two transactions for Sunstone Hotel Investors totaling more than $300 million.
Sunstone Hotel Investors completes disposition of Embassy Suites La Jolla and acquisition of Four Seasons Resort Napa Valley
Sunstone Hotel Investors Inc. has completed the previously announced sale of the Embassy Suites La Jolla and the acquisition of Four Seasons Resort Napa Valley.
The company sold the 340-room Embassy Suites La Jolla for a contractual sale price of $226.7 million or approximately $667,000 per key. The sale price represents a 22.3x multiple on 2019 Hotel Adjusted EBITDAre and a 4.0% cap rate on 2019 Hotel Net Operating Income. A portion of the funds from the sale were used to acquire Four Seasons Napa. Net proceeds, after those applied to the purchase of Four Seasons Napa, were allocated to repay a portion of the company’s outstanding term loans and have been offered to repay a portion of the company’s senior notes.
The company also acquired the fee-simple interest in the 85-room Four Seasons Napa for a gross purchase price of $177.5 million. The acquisition includes nearly 4.5 acres of vineyards and the Elusa Winery, along with the inventory of prior wine vintages.
The acquisition was funded through a combination of cash on hand, funds from the sale of the Embassy Suites La Jolla, and from borrowings on the company’s revolving credit facility. Upon stabilization, the company expects the resort to generate a 6%-7% net operating income yield.
Pebblebrook acquires Estancia La Jolla Hotel & Spa in La Jolla, CA for $108M
Pebblebrook Hotel Trust has acquired the 210-room Estancia La Jolla Hotel & Spa in La Jolla, CA for $108 million. The company retained Noble House Hotels & Resorts to manage the hacienda-style resort.
Estancia, spanning ten acres, is located in the heart of coastal La Jolla market. The resort is near Black’s Beach, next door to the Salk Institute for Biological Studies and adjacent to the University of California, San Diego. The resort has more than 50,000 sq. ft. of indoor and outdoor meeting and event space. It also features numerous indoor and outdoor dining venues, including Mustangs & Burros, Greenfinch Restaurant & Bar, Haven Bar & Grill, Blend Café and Secret Garden, which serve an array of authentic West Coast cuisine.
Additional resort amenities include Spa Estancia, a 7,000-sq.-ft. sanctuary with 11 indoor and outdoor treatment rooms, a eucalyptus steam room, a fitness center and an outdoor saltwater pool with poolside cabanas.
Pebblebrook is evaluating numerous operating and physical enhancements for additional upside and increased cash flow, including renovations to the property’s guestrooms, lobby, spa and pool areas, event lawns and ballroom. The resort will also become part of Curator Hotel & Resort Collection, which is expected to result in a wide array of expense reductions and enhanced technology and operating initiatives for the resort.
For full-year 2021, following a slow start to the year due to the COVID-19 pandemic, Estancia is forecasted to produce between $308 and $313 of total revenue per available room. The resort is expected to generate hotel earnings before interest, taxes, depreciation and amortization of $4.6 to $4.7 million and hotel net operating income after a 4% capital reserve, of $3.7 to $3.8 million. For 2019, the resort generated hotel EBITDA of $8.1 million and hotel NOI of $6.7 million.
The acquisition of Estancia brings the total number of properties in the company’s portfolio to 53, including 11 drive-to, independent lifestyle resorts.
The company funded the acquisition with approximately $46 million of cash on hand, and it assumed approximately $62 million of existing non-recourse, secured debt. The debt matures in September 2028. The interest rate on the debt is fixed at an annual rate of approximately 5.1%.
Newbond Holdings acquires Waterstone Resort & Marina Boca Raton
Newbond Holdings, a vertically integrated real estate investment and operating platform founded by Neil Luthra and Vann Avedisian has acquired the Waterstone Resort & Marina Boca Raton. This transaction marks Newbond’s second Florida hotel investment following the firm’s official launch earlier in the year.
Newbond acquired the 139-key hotel through an off-market transaction. With more than 8,000 sq. ft. of meeting space, two waterfront restaurants and a marina, the Waterstone Resort & Marina is uniquely positioned to benefit from the diverse demand drivers within the Boca market, including leisure transient travelers and business guests, according to the buyers.
The recently upgraded Waterstone Resort & Marina will also benefit from its close proximity to the Boca Resort, currently undergoing a $200-million complete transformation, which is expected to strengthen the overall performance of the market.
In September, a Newbond partnership acquired the Westin Tampa Waterside hotel, a 309-key waterfront property located in Downtown Tampa. Newbond also recently announced a $500-million lending platform with Madison Realty Capital that will focus on originating and purchasing hospitality loans in all major U.S. markets.
Key International and Wexford Real Estate Investors acquire Fort Lauderdale Marriott Pompano Beach Resort & Spa
Key International, a leading international real estate development and investment firm, and Wexford Real Estate Investors (WREI) have acquired the Fort Lauderdale Marriott Pompano Beach Resort & Spa, a beachfront hotel consisting of 219 suites.
APEX Capital Realty’s hospitality team identified the opportunity to trade this waterfront asset. Miguel Pinto, president/managing broker and Garrick Benabe, director, hospitality investments, APEX Capital Realty, represented the sellers Pompano Hotel I LLC et al. Pinto, Benabe and Ovy Anghel, commercial advisor, APEX Capital Realty, represented Key International in this off-market transaction.
Key International and WREI plan a major renovation to the property, which is located directly on the sand, steps away from the recently constructed Pompano Beach Fishing Village. Together, the companies plan to transform the property into a beachfront destination by creating a new, resort-style pool deck and renovating the room product as well as the on-site restaurant.
Amenities at the property include a spa offering an array of wellness treatments, a water-front fitness center, two on-site restaurants overlooking the coast and event spaces equipped to host up to 300 guests.
The hotel marks the latest addition to a long-term partnership between Key International and WREI. Together, the firms have developed multiple beachfront hotel properties with current assets in Panama City Beach, Jacksonville and Fort Lauderdale.
DSH Hotel Advisors arranges Sale of Quality Inn—Palm Bay/Melbourne, FL for $6.5M
DSH Hotel Advisors, a leading hotel brokerage and advisory firm headquartered in Tampa, FL has revealed that Dennis Hopper, managing principal and Randy Taylor, VP investments of the firm closed on the Quality Inn by Choice Hotels in Palm Bay, FL for $6.5 million.
DSH represented the buyer, S 4 Global Investments, and the seller, Palm Bay Hotel Venture LLC. The property is a 67-room hotel located directly off Palm Bay Drive NW, approximately one mile from I-95 and 9.8 miles from Melbourne Beach—positioned in a high growth area within Palm Bay/Melbourne. DSH Hotel Advisors was responsible for brokering the sale of the property.
Mission Hill Hospitality acquires oceanfront Hampton Inn in Myrtle Beach, SC
Mission Hill Hospitality, a KSL Capital Partners portfolio company, has acquired the Hampton Inn in Myrtle Beach, SC for an undisclosed amount. This is the 13th property in the Mission Hill Hospitality portfolio since the company was launched earlier this year.
The beachfront hotel has 228 guestrooms, including 52 suites, most with ocean views and terraces. Two 14-story towers, constructed from steel and concrete, total 187,301 sq. ft. The property has three outdoor and four indoor swimming pools, two lazy rivers and an outdoor children’s water play area. Planned capital improvements include a reconfigured lobby, guestroom updates and enhanced food and beverage offerings.
The property will be managed by LBA and will continue to operate under the Hampton Inn brand.
Marcus & Millichap arranges sale of two properties
Marcus & Millichap, a leading commercial real estate brokerage firm specializing in investment sales, financing, research and advisory services, has arranged the sale of two properties in separate transactions.
The company arranged the sale of the Fairfield Inn & Suites Macon West, a 64-room hospitality property located in Macon, GA, for $3.9 million.
Jack Davis, Joseph Simpson, Joce Messinger and Josh Williams, investment specialists in Marcus & Millichap’s Charleston office, had the exclusive listing to market the property on behalf of the seller, a private investor. The listing team also secured and represented the buyer, another private investor. John M. Leonard, Marcus & Millichap’s broker of record in Georgia, assisted in closing this transaction.
Fairfield Inn & Suites Macon West has an indoor pool, fitness center, vending machines, a large dining area and on-site parking. It is approximately five miles from the shopping and dining centers of The Shoppes at River Crossing and Macon Mall.
The company also arranged the sale of the Sleep Inn & Suites Tampa South, a four-story, 77-room hospitality property located in Tampa, FL. The newly built hotel sold for $9.5 million.
The deal was brokered by Ely Silverstein, Christopher Passeggiata, David M. Greenberg and Gabriel Shamay, investment specialists in Marcus & Millichap’s Fort Lauderdale office. The team had the exclusive listing to market the property on behalf of the Florida-based seller, Sitaram Tampa LLC. Based in Largo, FL, the buyer was also secured and represented by Silverstein, Passeggiata, Greenberg and Shamay.
Built in 2019, the 34,923-sq.-ft. property includes a fitness center, swimming pool, free private parking, a shared lounge and a wellness center.
Commonwealth Hotels acquires two Indiana hotels
Commonwealth has acquired the Staybridge Suites Indianapolis Fishers and the Hampton Inn & Suites Scottsburg Indiana.
Situated in the suburbs on the northeast side of Indianapolis, the Staybridge Suites Indianapolis Fishers hotel is minutes away from Castleton Square Mall, Conner Prairie History Park and downtown Indianapolis.
The Hampton Inn & Suites Scottsburg is less than five minutes from the shops and restaurants of downtown.