Jones Lang LaSalle Hotels has arranged the sale of the leasehold interest in the Hotel Pacific in Monterey, California to buyer, Not On Cannery Row LLC, a consortium of San Francisco based investors, for approximately $150,000 per room. Coastal Hotel Group will continue to manage the property. The sale of this property completes Jones Lang LaSalle Hotels` disposition of the five-property California coastal boutique hotel portfolio, as well as The Marshall House in Savannah, GA, on behalf of UBS Warburg.
“Five out of six hotels in this portfolio were sold prior to September 11,” said Vice President John Strauss of Jones Lang LaSalle Hotels who was instrumental in the deal. “This sale was delayed in light of the terrorist attacks, which obviously caused investors and lenders to pause and re-think their strategies. Once the general marketplace solidified, interest by both groups rebounded.”
The Hotel Pacific is a 105-room all-suite property located adjacent to the Monterey Convention Center in downtown. It is within walking distance to Fisherman`s Wharf and proximate to the Monterey Bay Aquarium and Cannery Row.
In early September 2001, a group of Monterey investors lead by first-time-hotel-buyer Ted Balestreri of the Cannery Row Company purchased Hotel Pacific`s sister properties—the Spindrift Inn, Monterey Bay Inn and Victorian Inn. The Cannery Row Company also retained Coastal Hotel Group as the manager. The Hotel Pacific will continue to be marketed along with these properties, which make up the Inns of Monterey.
In early July 2001, Classic Hotels & Resorts of Phoenix, Arizona purchased the 70-room, oceanfront Inn at Laguna for approximately $275,000 per hotel room. In October 2001, the Marshall House, an upscale boutique hotel property in Savannah, Georgia, was sold to local company, HLC Hotels, Inc.
“The six-hotel portfolio was probably the most sought-after hotel portfolio during the first half of 2001,” added Arthur Buser, Managing Director and Head of West Coast Operations for Jones Lang LaSalle Hotels. “Even though the technology bust in Northern California had ripple effects on Monterey`s group and leisure hotel market, the strategic location and inherent high barriers resulted in the long-term hold perspective of the bidders and the extremely favorable pricing for the seller.”
Mark Weinstock, a partner in the Real Estate and Global Hospitality Groups of Jeffer, Mangels, Butler and Marmaro LLP, was the lead attorney representing the seller in the portfolio transactions.