October 5, 2022

ilpuntontc

Just Do Travel

Dana Point Double Duty: Hotels Sell for $65M

3 min read

Investors are back in the market for Orange County hotels, specifically along the coast.

Dana Point is one such market enjoying this return, with two hotel deals totaling $65.2 million since March. The sales mark the first sizeable hotel transactions on record for the city since the onset of the pandemic, records show.

Most recently, the 196-room DoubleTree Suites by Hilton Hotel Doheny Beach sold for about $50 million, or about $255,100 per key.

And in March, the Blue Lantern Inn, a 29-room boutique hotel, sold for $15.2 million, or $524,000 per room.

The transactions come as OC hotels enjoy a return in occupancy and average daily rates in the wake of the pandemic.

Dana Point DoubleTree

Earlier this month, Goldman Sachs & Co. sold the Dana Point DoubleTree as part of a portfolio deal including one other property: a 226-room hotel in San Antonio, Texas.

New Orleans-based HRI Hospitality is the buyer of the DoubleTree, and plans to invest in a “comprehensive renovation” that will rebrand the property within the Hilton portfolio in a project slated to wrap by summer 2023.

CBRE Group Inc.’s Michael DiPrima and Diana Simpson brokered the transaction and arranged financing.

The sale of the DoubleTree is the priciest on record for Dana Point since the nearly $500 million sale of the Waldorf Astoria Monarch Beach, formerly the Monarch Beach Resort. It sold in November 2019 for $1.25 million per key and underwent a rebranding under the Waldorf Astoria flag about a year later.

The Dana Point DoubleTree last sold in 2014 for $32.9 million.

It was built in 1991 and went through an $8 million renovation in 2012, according to property records.

Directly across from Doheny State Beach, the seaside resort has 196 suites available and 13,643 square feet of event space. The Doubletree offers both indoor and outdoor space from a 300-person ballroom and 10 meeting rooms to two rooftop decks and beach access.

Guests are a mile away from the Dana Point Harbor center and next door to the Pacific Coast Highway.

On the Bluff

Another luxury beachfront hotel, the Blue Lantern Inn, was bought about two months ago by Yorba Linda-based Ocean Lodging, a private investor affiliated with Dineshkumar and Janakabala Patel.

JLL arranged $9.5 million in acquisition financing on behalf of the borrower.

Located on a bluff above Dana Point Harbor, the Blue Lantern was built in 1990 with a more intimate hotel setting of 29 rooms. It is one of 17 boutique hotels located across California curated by the Monterey-based Four Sisters Inns hospitality group.

Its main event space, The Library, is available for business and celebratory gatherings of around 40 people at 575 square feet.

“We are excited to add an asset in the high barrier to entry market of Dana Point to our portfolio. The Blue Lantern Inn will anchor our portfolio for future growth,” Dev Patel of Ocean Lodging said in a statement.

Whale of a Time

The city of Dana Point has made its mark as a world-class spot for whale watching and its marine life, becoming the first Whale Heritage Site in the Americas in early 2021, a title designated by the World Cetacean Alliance.

With 6.5 miles of beaches, Dana Point draws more than a million visitors every year.

As of March, average daily rates of U.S. hotels have gone up 6% compared to 2019 according to CBRE research. Monthly revenue per available room, or RevPAR, for luxury hotels in the states grew to 80% of 2019 levels this past February, and leisure travel indicators have nearly recovered.