Carey Watermark Pays $85M for Courtyard in Hotel Circle

By Alex Girda, Associate Editor

Carey Watermark Investors, a joint venture of W.P. Carey & Co. and Watermark Partners L.L.C., has snapped up the Courtyard San Diego Mission Valley/Hotel Circle for $85 million. The deal was arranged by Jones Lang La Salle Inc. managing director John Strauss along with senior vice presidents James Stockdale and Samantha Fisher.  

Information on the Web site of the seller, Tarsadia Investments L.L.C., indicates that the company is a Newport Beach, Calif.-based firm allied with two other hospitality-related companies: T2 Development, a development and investment management firm, and Evolution Hospitality, which provides hotel management services. Carey Watermark is retaining Evolution Hospitality to manage the property.

The Courtyard San Diego Mission Valley is a 317-key facility in Hotel Circle near Downtown San Diego. It offers ready access to popular attractions like the San Diego Zoo, Old Town, SeaWorld and local beaches. “The location and physical quality, together with consistent performance and strong brand and in-place cash flow, make it a solid addition to our portfolio,” explained Michael Medzigian, Carey Watermark’s CEO. The hotel has 7,000 square feet of meeting space, a business center, fitness facilities, an outdoor pool and multiple dining options. Courtyard San Diego Mission Valley was renovated in 2008.

Carey Watermark was attracted by the hotel’s “strong brand affiliation and robust performance, coupled with San Diego’s strong and improving fundamentals,” commented Jones Lang LaSalle’s Strauss. He noted that revenue per available room in the San Diego market increased 8.8 percent year-over-year through October, and occupancy is up 5 percent compared to 2011.

Image courtesy of hotels.com

Keating Hotel Group Refinances 2 Historic Gaslamp Properties

By Alex Girda, Associate Editor

The Keating Hotel Group has refinanced the Keating Hotel and the Mercantile Building, two neighboring properties in San Diego’s Gaslamp District. A team from Holiday Fenoglio Fowler L.P. led by Aldon Cole and Husayn Hasan placed a 10-year, 4.7 percent fixed-rate loan with Cantor Commercial Real Estate.

Located at 5th Avenue and F Street, the vintage buildings total 40,400 square feet. The 35-key Keating Hotel dates from 1890 and underwent its most recent major renovation five years ago. Pininfarina, perhaps best known for its collaboration with Ferrari, served as design consultant for that upgrade.

Dining venues include Croce’s Restaurant and Jazz Bar, Patrick’s Gaslamp Pub and a recently added lounge offering hotel access.

Located next door to the Keating Hotel, the Mercantile Building is currently home to a two-level Brick + Mortar restaurant.

Keating Hotel Group, which is headed by Edward Kaen and Chris Harris, will use the proceeds to retire existing debt and repatriate equity, HFF explained in a statement.

Image courtesy of thekeating.com

HFF Secures Debt for Holland Partners’ Downtown M-F Project

By Alex Girda, Associate Editor

Holland Partners Group Management Inc. has secured $45 million in construction and permanent financing for a 242-unit apartment complex in Downtown San Diego. Dubbed 15th and Market, the 243,000-square-foot  property will include 10,000 square feet of ground-floor retail space.

Senior managing director Tim Wright, managing director Casey Davidson and associate director Zack Holderman led the HFF team that arranged the construction loan and 10-year permanent loan. Holland Partners was represented by Thomas Warren, COO of Southern California development, and Brent Schertzer, a development associate.

According to data from Marcus & Millichap Real Estate Investment Services Inc., multi-family construction in the San Diego market is generally on an upswing. Despite a dip in permitting compared to last year, new product completions are well ahead of 2012 levels. Both permitting and completions will beat the tally for 2010 handily.

Chart courtesy of Marcus & Millichap Real Estate Investment Services Inc. marcusmillichap.com.

Image courtesy of ccdc.com

Cruzan/Monroe, Cigna Buy DiamondView Tower for $121M

By Alex Girda, Associate Editor

In a $121 million deal, Cruzan/Monroe and Cigna Investments Inc. have acquired San Diego’s DiamondView tower.  Seller Wereldhave USA was represented by CBRE Inc. The 15-story, 305,255-square-foot building is located at 350 Tenth Ave. and offers views of nearby Petco Park.

DiamondView Tower is 95 percent occupied by such tenants as the Fashion Institute of Design and Merchandising, Red Door Interactive, Cox Media, Comerica Bank, as well as CBRE’s Downtown San Diego office. CBRE will continue to handle leasing, as it has since the building’s completion in 2007.

The property includes a two-story lobby, as well as its signature 15^th-story skybox, available as a hospitality penthouse unit. The building offers services such as the Fit Athletic Club, a fitness center with an outdoor pool and deck. Developed as the first component of a baseball-centric project, DiamondView Tower will now be used to capture some of the area’s potential for street-level retail.

For a more on the sale of the DiamondView building, click here.

School District Sells Surplus Sites; Retail Center Fetches $27M

By Alex Girda, Associate Editor

The San Diego Unified School District has approved the sale of two unused school sites but is holding onto a third in hopes of attracting a developer, KPBS.org reported.

The district received bids of $16.5 million each for Barnard Elementary School in Ocean Beach and a similar bid for an elementary school site in Mission Beach. A third property, an undeveloped parcel in Paradise Hills, attracted a $3.1 million bid.

However, two board members blocked the sale of the Mission Beach site on the ground that finding a development partner would be a better option for the district than selling the property. The board ordered district staff to find an alternative site to sell from among seven designated for disposition.

In other transaction news, an affiliate of Kleege Enterprises paid $27.3 million for Clairemont Village, a 127,175-square-foot neighborhood center. Pacific Clairemont Holdings I, an affiliate of Essel Manager Inc., sold its property at a slight discount from the $29 million price that it paid for the property in 2005, the San Diego Business Journal reported.

Located at 3005-3033 Clairemont Drive and anchored by Keil’s Food Stores, the center was constructed in 1978 and is 85 percent leased to a tenant roster that also includes HomeTown Buffet, Time Warner Cable, Carls Jr. and McDonalds. Flocke and Avoyer Commercial Real Estate and CBRE Group Inc. represented Pacific Clairemont Holdings; Kleege Enterprises represented itself.

Image courtesy of sandi.net