Carey Watermark Grabs 372-Key La Jolla Hotel
- Jul 27, 2016
“We were attracted by the strength of the San Diego lodging market and its strong performance —CAGR in RevPAR of 7.3 percent from 2010 to 2015 compared to the national average of 6.8 percent,” Michael Medzigian, CWI 2 CEO, told Commercial Property Executive. “In addition, year to date through February of 2016, RevPar for La Jolla increased 8 percent over the same period last year.”
The 14-story hotel includes a 24,000-square-foot meeting and event space, a 467-space parking garage, an outdoor pool and sundeck, fitness center and business center.
The hotel has undergone a total of $21 million in capital improvements since 2011, including a $17 million comprehensive renovation completed in 2013. During the renovation, all guestrooms received a full soft and case good replacement and the property underwent a complete lobby and public space renovation, which included the creation of additional meeting space.
“We felt that the high barriers to entry and limited available sites for new hotel development in La Jolla would support the longer term value of the property,” Medzigian said. “Combined with its attractive near term cash flow and the enhancement of its market position by the recent renovations of the property, we felt the asset was a strategic addition in a market that has shown steady growth.”
According to Medzigian, the company plans to renovate the meeting space within the next 18-24 months.
The property is located within the Golden Triangle, just north of downtown San Diego and minutes from the oceanfront village of La Jolla and the Pacific Ocean. It’s close to many of La Jolla’s most popular leisure attractions, leading corporations and professional firms, as well as top research institutions, such as the University of California at San Diego.
The hotel is also surrounded by more than four million square feet of Class A office space and enjoys direct access via a sky bridge to the upscale Westfield UTC mall, anchored by tenants including Nordstrom and Macy’s.
“Given its proximity to significant demand generators and the limited availability of hotel development sites in the La Jolla market the property is positioned to generate attractive initial cash flow and maintain its leading market position over time,” Medzigian said. “This fits with our philosophy and objective of identifying and executing on attractive acquisitions in the resort, full-service and select service sectors that are initially accretive for the Carey Watermark Investors 2 portfolio.”
Earlier this month, CWI 2 acquired the San Jose Marriott, a 510-key hotel located in downtown San Jose, Calif., for $154 million.