After just three months of ownership, Hyatt Hotels Corporation has flipped the 59-room Alila Ventana Big Sur for $150 million, or around $2.608 million per room. This price point is around $2 million more than what the company paid in June when it acquired the hotel from Geolo Capital, the private equity investment arm of the John Pritzker family office, and its joint-venture partner Wanxiang America Real Estate, according to reporting by The Registry. The newest buyer is Bethesda, MD-based Host Hotels & Resorts, which has entered into a long-term management agreement with Hyatt.
This latest sale represents the second highest price per room ever paid in the United States for a hotel property. The sale of the Plaza Hotel in New York at $2.608 million per room is still the highest watermark achieved for the industry in this country.
Host estimates that the transaction represents 9.3 times 2021 estimated hotel EBITDA, according to sources.
When Hyatt purchased the property earlier this summer, John Pritzker, Geolo founding partner and director said, “We saw substantial unrealized value in controlling 59 of Big Sur’s 100 available full-service guest rooms and understood the potential to raise average daily rates following a comprehensive renovation, rebrand and repositioning.”
Originally developed in 1975, Ventana had a 40-year track record of operations. Geolo took the property to the next level, challenging the status quo both in terms of operations and physical improvements, by investing $23 million to complete a major renovation, according to a company statement after the sale to Hyatt.
Geolo’s improvements to the property included updating all 59 guest rooms, and the team paid special attention to highlighting the property’s incredible outdoor vistas spread throughout the resort’s 160 acres. Safari-style camping tents were created in the resort’s century-old redwood grove, the architecturally distinctive Glass House Gallery was constructed and an underutilized parking lot was converted into a sweeping ocean meadow.
Following the repositioning and Ventana’s alignment with the Alila brand, the property grew to achieve the highest revenue per available room of any hotel across Hyatt’s 1000+ global hotels and resorts, according to Geolo.
The sale comes on the heels of another record-setting sale of California luxury hotels. Earlier this week, The Registry also reported that Irvine, Calif.-based Sunstone Hotel Investors will be spending $175 million, or $2,058,823 per room to acquire the Four Seasons Napa Valley hotel. At that time, this was the third-highest price per room ever paid in California behind the Maybourne in Beverly Hills, which sold in December of 2019, and the Hyatt Alila Ventana Inn Big Sur, which sold in June of this year. The seller of the 85-room property was Boston-based Alcion Ventures, which just completed and opened the property earlier this year.
“There’s definitely a lot of capital out there, and if you have hotels that are in A+ locations with huge barriers to entry, there seems to be no ceiling or no cap on the price per room the buyers are willing to pay today,” said Alan Reay, president of Irvine-based Atlas Hospitality Group. “It speaks volumes for long-term prospects for California and the fact that you simply can’t duplicate this product.”