Hotels are changing hands fast in Southern California. The Hotel La Jolla, the La Jolla Inn and the Mission Valley Marriott all sold this month for a grand total of $123 million.
The Hotel La Jolla sold for $40 million to Khanna Enterprises, based in Irvine. The seller was Westport Capital Partners, with offices in Los Angeles and Wilton, Conn. Westport originally purchased the 110-room hotel in 2011 for $30 million. Ravi Khanna, President and CEO of Khanna Enterprises, said the acquisition of Hotel La Jolla was part of his company’s plan to own and manage quality-positioned hotels in upscale markets along the West Coast. The deal for Hotel La Jolla follows Khanna’s acquisition of the Sheraton Hotel in Agoura Hills and Custom Hotel in Los Angeles in 2014.
The previous owner had spent about $6 million to complete room upgrades and to renovate the penthouse restaurant, now called the Cusp, by adding a new lobby, entrance and an outdoor lounge and bar. Khanna will probably have to invest in some more renovations. A burst water pipe in the 43-year-old hotel forced guests to evacuate several rooms in mid-February.
Meanwhile, the Mission Valley Marriott on Rio San Diego Drive sold for $76 million to Wheelock Street Capital, a real estate investment firm based in Greenwich, Conn. The seller, Marriott’s Host Hotels & Resorts, announced the deal in its most recent filing with the Securities and Exchange Commission. Originally built in 1989, the 350-room hotel features a 16-story tower and hosts weddings and other large events in its 19 conference rooms totaling 28,000 square feet. The hotel’s amenities include the Den, a gourmet dining room, a fitness center and an outdoor pool and waterfall with private cabanas. In its filing with the SEC, Marriott said it did not consider the Mission Valley property a core part of its holdings.
The La Jolla Inn, a hotel built in 1947, just sold for $7.1 million to the locally-based Oceanic Properties. The 23-room property on Prospect Street was sold by Anthony Torbali after completing a $1 million renovation and upgrade. The hotel’s previous owner, Charles Dunn, originally sold it to Torbali in 1995.
Also in the news this month, Blackstone Group, a New York-based private equity firm, agreed to sell Strategic Hotels & Resorts to the Beijing-based Anbang Insurance Group for $6.5 billion. Included in the deal are the Loews Santa Monica Beach hotel and the historic Hotel del Coronado near San Diego. Two other Southern California properties, the Montage Laguna Beach and the Ritz-Carlton Laguna Niguel, will also change hands under the deal. Blackstone only completed its purchase of Strategic Hotels, a Chicago-based real estate investment trust, in December of last year. The original sale was estimated at nearly $4 billion and $2 billion of debt, for a total of $6 billion. A source close the sale could not immediately confirm how much of the Blackstone-Anbang deal includes debt.
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(all data current as of 5/25/2017)
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