San Diego, CA
San Diego records biggest hotel sale so far this year: $165M
In what is the single biggest hotel sale so far this year, the 394-room Hilton La Jolla Torrey Pines resort has been acquired for $165 million by a Los Angeles-based investment firm that owns no other hotels in San Diego.
JRK Property Holdings, a real estate company that focuses largely on multi-family housing, was drawn to San Diego because of its stature as a lucrative hospitality market. But the real draw was the Hilton property, given its highly desirable location near the coast, said executive Shaan Bhatia.
It also helped that JRK had $350 million in investor money still sitting in a separate hospitality fund waiting to be spent.
“The Hilton was on the market, and we’d been hunting,” said Bhatia, who is head of hotel investment for JRK. “San Diego is in our view one of the major growth markets, and there’s a very strong life sciences corridor next to this hotel that makes this a very strong long-term bet to make. It’s also in a sub-market where there’s no new supply coming in.”
While the hotel’s last major renovation was a decade ago, there have since been “patchwork” refreshes, Bhatia said.
The hotel, with rooms overlooking the Torrey Pines Golf Course and Pacific Ocean, continues to do well financially, but JRK still plans to eventually invest $30 million in property upgrades, although those specific plans have yet to be finalized, Bhatia said.
“Over time, the property will need some level of upgrade, particularly the rooms,” he conceded. “But the property still performs extremely well and outperforms almost all of the local competitors in the aggregate because of its location and brand. We’re working through our plan right now but over time there should be a relatively comprehensive renovation.”
Selling the hotel was Braemer Hotels and Resorts, which noted in a news release that the sale enabled it to pay off the last of its remaining debt maturities in 2024. JRK will not own the resort property itself as the Hilton Hotel sits on city-owned land. There are 63 years remaining on the hotel’s lease with the city, Bhatia said.
While JRK used a portion of its hospitality fund to help finance the Hilton purchase, a loan was still needed, Bhatia said. High interest rates have been a key factor fueling a downturn in hotel sales statewide. Bhatia, however, pointed out that his firm was able take advantage of more favorable loans via the commercial mortgage-backed security market. In the case of the Hilton acquisition, the company put in one-third equity and took out a loan on the balance, Bhatia said.
With the purchase of the La Jolla hotel, JRK will now own a total of 1,500 hotel rooms, including the Ace Hotel in Palm Springs, the Oceana Santa Monica, five properties in south Austin, and two in San Juan, Puerto Rico, Bhatia said.
Emmy Hise, senior director of Hospitality Analytics for the commercial real estate firm CoStar, pointed out that while the Hilton Torrey Pines is among the priciest sales in the Western U.S., the price paid per room is less than comparable sales in the area.
“The Hilton is the highest-priced hotel transaction in the San Diego market since 2022,” she said, “but the price per key (room) is lower than similar hotel types that traded in the area in the past five years. This is likely due to the needed capital expenditures or required property improvement plans.”
The 35-year-old Torrey Pines property, which at one time was owned by Hilton, last changed hands in 2013 when Braemar purchased it from Ashford Hospitality Trust as part of an eight-hotel portfolio. Ashford serves as the adviser to both the Hospitality Trust and Braemar. The last time the hotel was sold by itself was in 2003 when it commanded a price of $106.5 million.
“When you look at the price they paid per room — $418,000 — that’s still below replacement cost, and it would be extremely difficult to replace this hotel, because of its location and the fact you have to deal with the Coastal Commission,” said Alan Reay, president of Atlas Hospitality Group. “So I think it’s a very good acquisition for the buyer. San Diego is still one of the best performing markets in California.”
Nonetheless, hotel sales in California, Reay said, remain down compared to a year ago, but the decline has more to do with a disconnect between what hotel owners think their properties should sell for and the dollar figure that buyers are willing to pay.
Originally Published:
San Diego, CA
Guest Column: The black hole in the center of Poway
Those of us who live near the City of Poway Town Center have experienced and continue to see a development project that has languished for over five years and now clearly can be defined as blight.
It is a “black hole” that is anchored in the center of the city near the intersection of Poway and Community roads, one block from City Hall. The project is adjacent to the Poway shopping center plaza, a Section 8 apartment complex and the Poway Bernardo Mortuary.
Those of us who live in central Poway have this visual blight, which consists of a partially constructed vacant multistory building and an unfinished tiered underground parking structure. This incomplete project was approved by the City Council in 2018 as a mixed-use development project.
It sits on a one-and-a-half-acre infill site and was originally permitted for 53 residential units, a 40,000-square-foot commercial space, a 20,025-square-foot fitness center and a two-tiered underground parking structure.
Over the last five years it has transitioned through three different developers and multiple permit amendments. The current and final amended project is a significantly scaled-down project. It would take someone with a bachelor’s degree in city and urban planning to read the permit amendments and comprehend what the final project will consist of if and when it is completed.
Those of us who live in or near the Town Center district are aware the Poway Road Specific Plan was approved with City Council commitment that high-density development would be well planned and would consist of “efficient high-density development.”
A blighted development project that has not been completed and has remained vacant and unfinished for five years is not keeping with the Specific Plan. This project is a blemish on central Poway. The City Council has not implemented solutions to complete this unfinished project.
Further, other development projects in the same corridor have as a matter of practice during their construction phases posted signage on their respective construction fencing, advertising what the project consists of and when it is estimated to be completed. The “black hole” has no such signage on its construction fencing and the general public has no idea what this project consists of or when it will be completed.
Direct attempts and meetings to obtain information from previous and current city representatives have resulted in finger-pointing at the developer. Two developers have already walked away from this project and the third and current developer is under contract with a local general contractor.
The City Council approved, conditioned and permitted this project. I have to think that if this project was located in the “Farm” development area and stood half developed and vacant for over five years there would be a different level of urgency by the council to finding a solution to correct this unsightly development project.
The council has failed those of us who live in and near the Poway Town Center corridor. Stop blaming the developer and get this failed project completed.
Locke is a 22-year U.S. Marine Corp veteran and a longtime Poway resident.
San Diego, CA
Frustrated teachers walk out of SBUSD meeting that decided to close Central Elementary
Frustrations boiled over at Wednesday night’s South Bay Union School District meeting. Parents and teachers are upset that the district is going to shut down Central Elementary and possibly two others at a later time.
At one point in the meeting, teachers got so upset that they walked out. It came after the school board voted unanimously to approve an interim superintendent’s pay package for nearly $18,500 a month.
That payday comes at time when teachers rallied outside the meeting because they might strike since they’ve been in contract negotiations for more than a year.
The board also voted unanimously to close Central Elementary at the end of this school year. Berry and Sunnyslope Elementary schools could close as well, at a later time. But that’ll be based on a review of enrollment and financial data going forward.
The district says declining enrollment and declining revenues are major problems and factors in its decision. It says keeping under enrolled schools open would increase maintenance costs, stretch limited resources and hamper the ability to deliver equitable services across all schools.
But teachers and parents say paying the interim superintendent that amount of money shows it’s a matter of allocation and priorities.
Hinting that district leaders are being scrooges, a group of teachers took a page out of “A Christmas Carol” and dressed as ghosts.
“By closing these doors, you destroyed the heart of community. Families see no future, pack their cars and leave behind empty houses and desolate streets,” one teacher said.
While only Central is closing this year, Sunnyslope could close at the end of the 2028-2029 school year. Berry could close at the end of the 2031-2032 school year.
San Diego, CA
Spring Valley Christian school teacher suspected of sexually abusing child
A 49-year-old teacher at Christian High School, suspected of sexually abusing a minor, was arrested Tuesday outside the Spring Valley school affiliated with Shadow Mountain Community Church.
Kevin G. Conover was booked at the San Diego Central Jail on suspicion of oral copulation with a victim under 18, aggravated sexual abuse of a child under 14, three counts of lewd and lascivious acts with a child, and continuous sexual abuse of a child, according to the San Diego County Sheriff’s Office.
Deputies initially responded to a radio call regarding sexual assault allegations of a minor by a family member on Oct. 1, prompting an immediate investigation by Child Abuse Unit detectives, who later found probable cause to arrest Conover, sheriff’s officials said.
Conover was described as a teacher at the school in Tuesday’s statement from the sheriff’s office announcing his arrest. However, there were no references to him on the school’s website on Tuesday night.
The investigation remains ongoing by the Child Abuse Unit as investigators conduct a follow-up into the allegations.
Anyone with information regarding the alleged abuse was urged to call the Child Abuse Unit at 858-285-6112. Calls after business hours should be directed to 858-868-3200. Tipsters who remain anonymous can call Crime Stoppers at 888-580-8477.
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