Sale of Hyatt Centric Santa Barbara Closes

Chesapeake Lodging Trust sold the 200-key property to an undisclosed buyer after a five-year hold, during which the countywide hospitality market has thrived.
Hyatt Centric Santa Barbara
Hyatt Centric Santa Barbara

Chesapeake Lodging Trust, of Arlington, Va., has closed on the previously announced sale of the 200-key Hyatt Centric Santa Barbara in Santa Barbara, Calif., for a price of $90 million, or $450,000 per guestroom.

The seller used the net proceeds to repay all outstanding borrowings under its revolving credit facility. The buyer was not disclosed.

CLT had acquired the Hyatt Centric Santa Barbara property in June 2013 for $61 million, or $305,000 per key. In April 2016, it sold a separate, five-room villa building and related land parcel at the property for $2.1 million to an unrelated buyer.

The $90 million sale price represents a 5.4 percent trailing 12-month NOI cap rate and produced a 15.3 percent unlevered IRR over CLT’s ownership period.

The hotel, at 1111 E. Cabrillo Blvd., features 21 guestrooms with ocean-view balconies or patios, a restaurant serving contemporary American cuisine, a fitness center, a heated pool and 10,000 square feet of flexible event space.

Chesapeake Lodging Trust focuses primarily on upper-upscale hotels in major business and convention markets and selectively on premium select-service hotels in urban settings or unique locations in the U.S. It currently owns 20 hotels with a total of 6,279 guestrooms in eight states and the District of Columbia.

CLT did not respond to Commercial Property Executive’s request for additional information.

Limited construction, classy properties 

The Santa Barbara County hospitality market has seen steady growth in both ADR and RevPAR since 2012, according to a 2018 forecast by CBRE Hotels.

One reason for these solid numbers has been limited new supply in the county. The CBRE forecast mentions only a handful of properties opening in 2017 and 2018, including the 121-key Hotel Californian, an 88-key Hyatt Place on Highway 154 and the 161-key Rosewood Miramar opening in January 2019, along with a few other properties in Goleta, Buellton and Lompoc.

The oceanfront Rosewood Miramar is being developed by Caruso Affiliated and built by Tutor Perini Corp. on the former site of the original Miramar Hotel, and will feature cottages and bungalows on the 16-acre site. Opening is currently scheduled for January 2019.

Image via Google Street View