Irvine Marriott Sells at California’s Top Hotel Price This Year

CoStar
08/29/19

Irvine Marriott Sells at California’s Top Hotel Price This Year
Investor Interest in Golden State’s Hospitality Drives Increased Sales
By Karen Jordan

https://product.costar.com/home/news/shared/1293453670

An investor has bought the Marriott Irvine in Southern California’s Orange County for more than $152 million, or about $314,000 per room, according to public records. That price tag would represent the most expensive hotel sale of the year in the Golden State, CoStar records show.

Investment manager CBRE Global Investors Ltd. sold the 485-room hotel at 18000 Von Karman Ave. in Irvine to Plaza Investment & Consultancy LLC.

The deal surpasses what had previously set the year’s top hotel sales price in California, the $136 million sale of the Hyatt Regency La Jolla in San Diego last month, according to hospitality brokerage and consultancy Atlas Hospitality Group. The Marriott’s per-room sales price is the highest paid in Irvine since the sale of the AC Hotels by Marriott at 3309 Michelson Dr. to Pacific Hospitality Group in March 2017 for roughly $373,000 per door, according to CoStar data.

The Marriott Irvine, which is the second-largest hotel by room count in Irvine, last sold in June 2015 when CBRE Global Investors paid $128.5 million, or about $265,000 per key, to The Blackstone Group LP, according to CoStar data.

“Irvine is no question a prime, prime market,” said Alan Reay, president at Atlas Hospitality Group in Irvine, noting that the latest transaction is “a very significant sale and speaks volumes to the buyer demand in Orange County for quality branded hotels in good locations.”

CBRE Global Investors and a representative for Plaza Investment & Consultancy declined to comment on the sale.

The property is located near several high-density office buildings, the 405 Freeway and the John Wayne Airport, putting it in reach of many area travelers. The city attracts business travelers, convention and meeting travelers, sports teams and tourists headed on vacation, according to Ed Fuller, president of the Orange County Visitors Association.

Irvine has seen recent growth in job sectors including the finance, technology and business services industries, which should help the area maintain its stability in the future, according to a recent report by CoStar Market Analytics.

The sale comes as increased interest in California hotels pushed the state’s price paid per room to a record median price of $130,025, up 12.7% from the first six months of 2018, according to Atlas Hospitality Group, which was not involved in this sale. That’s also a rise of 146% over the past 10 years.

The number of hotel property sales in California rose 8% in the first half of 2019 from the same time last year as 145 properties changed hands, according to Atlas. Those transactions totaled $2.05 billion, a total dollar volume that was down almost 12% from a year earlier.

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