Del Mar Area Hotel Is Sold

July 2, 2015

The 224-room DoubleTree San Diego Del Mar hotel has been sold to a San Diego firm for $40 million, marking the fourth San Diego lodging property to sell in the last couple of months.

The buyer, Southwest Value Partners, a private real estate investment firm that focuses on commercial, hospitality and residential properties, declined to comment on its purchase. Among its holdings are the Westin Hilton Head Island Resort & Spa in South Carolina, the InterContinental New Orleans and the Westin San Diego on West Broadway downtown.

Brokering the sale on behalf of the seller, PHF Ruby LLC (an affiliate of Fillmore Capital), was CBRE Hotels. The 5-story property on El Camino Real in Carmel Valley originally opened in 1991 and underwent a partial renovation in 2012.

While CBRE would not reveal the sales price of the hotel, it was listed as $40 million by Real Capital Analytics, a research company that tracks hotel sales throughout the country. Based on the per-room sales price, it appears Southwest made a good deal, said hotel analyst Alan Reay.

“At a per room price of $180,995 it is at the lower end of the sales comp price range and well below the replacement cost for this asset,” said Reay, president of Orange County-based Atlas Hospitality Group. “Strong interest from overseas buyers, as well as local players, such as Southwest Value Partners, REIT’s and private equity firms are all driving prices and strong interest in the hotel sector. San Diego and in particular, the Del Mar market, are considered a very desirable hotel investment market.”

Given some of the recent prices that hotels have commanded, it has become increasingly attractive for owners to sell, Reay added.

Other recent sales include the 219-room DoubleTree Hotel in Mission Valley, the 417-room Hyatt Regency La Jolla and the nearly 400-acre Grand Del Mar Resort, which sold for $230 million. In that transaction, the hotel’s developer, Doug Manchester, retained a 12 percent ownership interest.

The DoubleTree in Carmel Valley will continue to operate under the DoubleTree by Hilton brand, but Southwest Value Partners has retained Dimension Development Company to manage it. Dimension manages a number of mid-scale hotels throughout the country.