Hyatt La Jolla will be sold for $118M

Hyatt La Jolla will be sold for $118M

A year after taking over full ownership of the Hotel del Coronado, Strategic Hotels and Resorts has decided to unload its interest in the Hyatt Regency La Jolla in a deal valued at $118 million.

The Chicago-based real estate investment firm, along with its joint venture partner, which is affiliated with the government of Singapore Investment Corp., announced on Tuesday its intent to sell the 417-room hotel to affiliates of Walton Street Capital and JMA Ventures. The sale, which will allow the Strategic joint venture to retire more than $89 million in debt, is expected to close some time during the second quarter of this year.

In its announcement, Strategic said little about what was driving the planned sale, other than to indicate it is part of its overall strategy to part with its “non-core assets.”

The move, though, appears to be guided by its growing interest in high end resort properties, said hotel analyst Alan Reay. In January, Strategic purchased the 250-room Montage Laguna Beach for $360 million and at the time assumed a $150 million mortgage. It also owns a number of other marquee properties like the Ritz Carlton in Laguna Niguel and the Loews Santa Monica Beach.

“It tells me they’re going into higher end resort trophy hotels,” said Reay, president of Atlas Hospitality Group. “To me, Hyatt is a trophy hotel but more a business hotel vs. a resort hotel. Wall Street likes these very high end trophy properties with huge barriers to entry, and with them, your company will be worth a lot more money.”

The $118 million purchase price, he said, seems low based on previous comparable sales.

Source: http://m.utsandiego.com/news/2015/apr/28/hyatt-regency-la-jolla/

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