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Orange County, California Hotel Sales are Back; Nineteen Hotels Changed Hands in the First Half of 2004, 
versus 13 a Year Earlier
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Aliso Creek Inn and golf course: 
highest price per room of all sales

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By Sandi Cain, November 2004

Orange County, California hotel sales are back.

Nineteen hotels changed hands in the first half of the year, versus 13 a year earlier, according to Costa Mesa-based Atlas Hospitality Group. That’s the highest six-month total since 2001.

Atlas President Alan Reay said the pick up in hotel sales comes from pent-up investor demand since 2001 and a positive economic outlook.

“Room rates and occupancy are up across California, except in San Jose,” Reay said. “Major investors are seeing hotels as the last bastion of good deals in commercial real estate.”

Los Angeles County led the Southland in total sales, with 41 hotels sold this year compared to 32 a year earlier.

Orange County hotels brought in the highest median sales price, at $4.5 million, up from $3.2 million last year. California’s overall median sales price was $3.1 million.

Orange County posted a 151% jump in total sales to $174 million in the period—the highest percentage increase of San Diego, L.A., Riverside and San Bernardino counties. Orange County trailed only L.A.’s $445 million in total sales.

The largest sale in the county was the 489-room Irvine Marriott, which Arlington, Va.-based Meristar Hotels & Resorts picked up from Irvine-based Cigna Hotel Associates I LLC for $92.5 million in June. Meristar is one of the nation’s largest hotel real estate investment trusts.

Cigna Real Estate Investors of Hartford, Conn., was the managing partner of Cigna Hotel Associates. The owners had set a sale for 2001, but were put off after the terrorist attacks hit the hotel market, said Bernie Murphy, an executive with The Plasentia Group in Encinitas, which represented Cigna Hotel Associates in the sale.

“(The hotel) has been a strong performer for a long time,” Murphy said. “The fundamentals of Irvine are still great.” At the time of the sale, Meristar Chief Executive Paul Whetsell cited an improving business travel market, higher room rates and operating margins at the company’s similar hotels as reasons for the buy.

Meristar almost immediately announced public space and meeting room renovations for the hotel. Work is set to begin this week.

In Laguna Beach, the $17.6 million purchase of Aliso Creek Inn by Montage Resort & Spa was the second-biggest sale in the county.

Highest Sale Per Room

The Aliso Creek sale was the highest-priced deal in the county at $284,468 per room. It was the second highest in the state among hotels with a selling price of $5 million or more.

The 62-room Aliso Creek Inn includes a nine-hole public golf course, a clubhouse and the Canyon Lodge American Grill restaurant. There has been speculation that the Montage will expand the golf course to 18 holes, but the new owners haven’t given specific plans for the property.

A similar-sized hotel, the 64-room Argyle Hotel in West Hollywood, brought in the highest price per room in the state at $289,063.

The third biggest OC sale in the first half of the year was the 225-room Fullerton Marriott at California State University, Fullerton. That hotel was sold last January for $11.9 million by Host Marriott Corp. of Bethesda, Md., as part of a $70 million sale of several hotels.

The buyer was a joint venture group comprised of HEI Hospitality and Greenfield Partners LLC, both of Norwalk, Conn.; and GIC Real Estate Pte Ltd., the real estate investment arm of the Government of Singapore Investment Corp.

Boston-based J/Brice Design International Inc. has been hired to revamp the interiors of all hotels in the Host Marriott sale. Renovations to public spaces, meeting rooms, rooms and corridors are expected.

Rounding out Orange County hotel sales of $5 million or more for the first half of the year:

  • The 122-room Hampton Inn & Suites Santa Ana, which sold for $7.9 million
  • The 135-room Fairfield Inn in Buena Park, which sold for $6.2 million
  • The 101-room Comfort Inn & Suites Anaheim West, which sold for $5.8 million
In Los Angeles, where the number of sales increased by 37%, the largest sale was the 637-room Renaissance Hotel in Hollywood for $88 million.
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Sandi Cain is a freelance writer and contributor to the Orange County Business Journal and meetings industry publications. She specializes in hospitality, tourism and travel. Cain holds bachelor’s and master’s degrees in education from Kent State University in Ohio, where she majored in social studies. A former high school teacher, she has written for niche-market sports publications in the U.S., England and Australia and formerly worked in both the printing and high-tech industries. A Cleveland, Ohio native, Cain hasbeen a resident of Laguna Beach since the late ’70s. She enjoys travel, gardening, reading and spoiling her three cats.
.

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Contact:
Sandi Cain
Laguna Beach CA
949-497-2680
sdcain31@cox.net

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Anaheim City Officials Lobby Republicans and Democrats for a 2008 Convention; But Whether it’s Worth the Effort is a Matter of Debate / Sandi Cain / September 2004
Tarsadia Boosting Upscale Hotel Holdings With Sutton Place Hotel in Newport Beach Buy / Sandi Cain / August 2004
Anaheim Convention Center Occupancy at Post-renovation High of 81.8%, Future Bookings Solid / Sandi Cain / August 2004
Hotel, Upscale Gym Planned at Summit Complex in Aliso Viejo, California; a 175-room Renaissance ClubSport / Sandi Cain / July 2004
Hotel Design Has Come a Long Way from the Cookie-cutter Days of the 1980s; Designers Aim for Warm, Nurturing Feel Post-Sept. 11 / Sandi Cain / July 2004
Hotel Development in Orange County, California All But Dries Up; Handful of Small Hotels Opens, Little Construction Under Way / Sandi Cain / June 2004
The 6-year-old Orange County (California) Tourism Council May be Victim of Budget Cutbacks / Sandi Cain / June 2004
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Cities from Anaheim to Laguna Beach, Rife with New Resorts, Look to Grab Summer Business; Sunnier Outlook Ahead for Summer Travel Season / Sandi Cain / May 2004
Tony Bruno, VP and General Manager of Disneyland Resort Hotels, Maps Out 2004 Changes / Sandi Cain / March 2004
Disney Planning for Big Year in Anaheim Amid Board Drama / Sandi Cain / March 2004
Tourism Industry Rethinks Promotion on Security Issues Data / Sandi Cain / February 2004
Orange County’s 50 Largest Hotels with Meeting Rooms Report 3% Jump in Space in 2003 / Sandi Cain / January 2004
Tale of Two Converntions; Las Vegas Versus Anaheim: Trade Groups Take Opposite Tack in Convention Plans / Sandi Cain / January 2004
Meeting Bookers Optimistic 2004 Will Mark Rebound Despite Potential Hurdles; Attendance Boosts at Recent Conventions Have Made Orange County California Hoteliers Hopeful / Sandi Cain / January 2004
Hotels, Theme Parks in Orange County, California Start Aggressive Push for In-State Visitors During Holidays / Sandi Cain / November 2003
An Oranges to Oranges Comparison; Anaheim and Orlando Share Tourism and Meeting Destination Bent, Differ in Some Areas / Sandi Cain / August 2003
New Coastal Resorts Helped Orange County, California Post Gain in Hotel Rooms / Sandi Cain / August 2003
Orange County California Hotel Building Remains Sluggish; Bright Spot: the Burgeoning Resort Market along OC’s Pacific Coast / Sandi Cain / July 2003
Sunstone Hotel Investors LLC and Tarsadia Hotels Expanding by Going After Weaker Hotels in Key Markets / Sandi Cain / June 2003
Orange County's Travel Agencies Continue to Suffer from a Downturn in Travel / Sandi Cain / May 2003
Hoteliers Worry as War, Economy Hit Bookings; A Weak Tourism Industry Threatens to Get Weaker / Sandi Cain / April 2003
Budget Ax Threatens Orange County's Tourism Comeback / Sandi Cain / February 2003
Pacific Islandia California Inc., Owner of the 489-room Sheraton Anaheim Hotel, Files for Bankruptcy Protection; Bankruptcy Over Dispute, Not Results / Sandi Cain / February 2003
Security Detail; High-Profile Meetings Have Police on Special Alert / Sandi Cain / January 2003
New Hotels, Remodelings Spur Growth in Orange County Meeting Space Amid Slow Recovery / Sandi Cain / January 2003
Security Detail; High-Profile Meetings Have Police on Special Alert / Sandi Cain - January 2003
Tarsadia Hotels Building Residence Inns in Garden Grove, San Diego, Buys the 201-room Crowne Plaza in Las Vegas / Sandi Cain / Dec 2002
Bucking Convention - Anaheim Center Expansion Seems to Pay Off as Other Cities Struggle / Sandi Cain / Nov 2002
Ayres Breaks Ground on L.A. Hotel, Expanding Two Others / Sandi Cain / Oct 2002
Orange County California's Hotels, Convention Center Upbeat Despite New Competition and Weak Economy / Sandi Cain / Aug 2002
Ritz, Surf & Sand, Vie With Beach Resort Newcomers Along California's Orange County Coast; Almost 1,000 rooms Set to be Added / Sandi Cain / Aug 2002
Orange County California's Hotels, Convention Center Upbeat Despite New Competition and Weak Economy / Sandi Cain / Aug 2002
Montage Founder, Alan J. Fuerstman Sees Big Things for Laguna Colony Luxury Hotel, Acquired from Marriott International for $190 million / Sandi Cain / July 2002
Orange County’s $6 billion Annual Tourism Industry Shaking off the Downturn / Sandi Cain / May 2002
The Orange Riviera - New Luxury Hotels and Renovation Projects Transforming OC’s Coast / Sandi Cain / May 2001 
Orange County Hoteliers Hope for a Solid Summer Season to Regain Momentum / May 2002 / Sandi Cain
Hotel Brokers: From Sales to Consultants / Sandi Cain / Jan 2002 
Tourism Officials Focus on Security of Events and Sites as Key to Attracting Visitors / Sandi Cain / Jan 2002 
Orange County Travel Agencies Bear Brunt Last Week, Waiting For Fallout / Sandi Cain / Sept 2001 
St. Regis Monarch Beach Resort & Spa Opening Adds to Competition in South Orange County California / Sandi Cain / Aug 2001 
The Orange Riviera - New Luxury Hotels and Renovation Projects Transforming OC’s Coast / Sandi Cain / May 2001 
Ayres Hotel Group Expands, Rebrands / Sandi Cain / March 2001
Orange County’s Hoteliers Relieved as Anaheim Convention Center Expansion Boosted Occupancy and Rates During Past Year / Sandi Cain / May 2001
Indomitable Disney / Bad News Doesn’t Tarnish the Mouse; Slowing Economy Another Matter /  / Feb 2001 
Orange County Hotels Poised for Meetings Growth; Newcomers Help Bolster Total Space; Disneyland Hotel Still No. 1 / Sandi Cain / Jan 2001 

 


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