Malkin Properties Gets $155M Loan for 2 CA Hotels

The projects in Oceanside will total more than 350 keys. Destination Hotels & Resorts will operate one of the assets, while Joie de Vivre will be in charge of the other.
Rendering of the two hotels
Rendering of the two hotels

S.D. Malkin Properties is the recipient of a $155 million construction loan for the development of two oceanfront hotels in Oceanside, Calif., in metro San Diego. HFF placed the financing with Bank OZK of Little Rock, Ark., and an East Coast-based institutional investor. Malkin declined to disclose a total dollar value for the project.

The 2.8-acre, two-block site is along Mission Avenue and North Pacific Street, with immediate access to the beach. Totaling 387 rooms—most of them with water views—the two hotels will be operated by Destination Resorts and Joie de Vivre. The first one is slated to include 226 keys, a signature restaurant, indoor/outdoor lounge, pool with ocean views, luxury spa and more than 20,000 square feet of meeting and event space.

The second property is set to have 161 keys, a rooftop pool and bar, restaurant, public garden and 3,000 square feet of retail space. The historic 1880s-vintage Graves House, which appeared in the movie “Top Gun”, will be part of this property following a complete renovation that will enable the owner to keep it open to the public.

“Oceanside is buzzing with activity from new residential development to chef-driven restaurants. It is a quintessential California beach town with an authentic retro vibe,” Jeremy Cohen, Malkin senior vice president, told Commercial Property Executive.

The HFF team representing the borrower included Senior Managing Directors Timothy Wright and Scott Hall, Director Olga Walsh and Analyst Aaron Lapping.

“The beachfront hotels will be distinctive, but complementary, providing a full-service and boutique experience in downtown Oceanside’s burgeoning retail, restaurant and entertainment district,” Wright said, in prepared remarks. “The hotels will help meet the demand for high-quality, unique beachfront hospitality in San Diego and Southern California.”

From the ocean to the mountains

Last year, at the opposite edge of San Diego County, the renovated Willows Hotel & Spa, in Alpine, was reopened by Viejas Casino & Resort. Among other upscale amenities, the 159-key property features a saltwater pool.

As of November, San Diego County hotels averaged 80 percent occupancy, with an ADR of $168 and RevPAR of $134.3, according to the San Diego Tourism Authority. Countywide, as of December, 43 hotels totaling about 7,200 guestrooms were in the pipeline for delivery between 2019 and 2021.

Image courtesy of S.D. Malkin Properties