The Bay Area hotel market is perhaps one of the best in the country. And investors have been confirming that with recent acquisitions across the region.
Now, the Sofitel San Francisco Bay in Redwood City has a new owner, CBRE Global Investors, which paid a total of $154.5 million for the Redwood City hotel, according to public documents. The luxury hotel has 421 rooms, making the sale price around $367,000 per room. The sellers were a joint venture of Prudential Real Estate and Lodging Capital, who purchased the property about 3 years ago for just over $90 million.
Sofitel San Francisco Bay was built in 1987, but has recently undergone renovations of almost $10 million. The full-service high-end hotel also includes 20,000 square feet of conference and meeting space as well as a parking garage. CBRE Global Investors plans to renovate a further 100 rooms and also streamline some of the catering offers in the hotel to generate more value from their purchase. The hotel will remain within the Sofitel brand under the new ownership.
Eastdil Secured marketed the property.
Sales of hotel properties in California reached a record dollar volume of more than $4.4 billion in the first six months of 2015, a 64 percent increase over the same period in 2014, according to Atlas Hospitality Group’s recently completed 2015 Mid-Year California Hotel Sales Survey. Median sales price per room increased 25 percent, and 13 deals traded in $100 million-plus range versus four for the same period in 2014.
The average Northern California hotel sale was nearly $21 million or $131,000 per room, which was a 13.74 percent increase over the year before, according to Atlas’ report.
The activity has prompted recent announcements of hotel development on the Peninsula. In San Carlos, Irvine, Calif.-based R.D. Olson Development plans to build a 204-room extended-stay hotel on Industrial Road and East San Carlos Avenue. The so-called Landmark Hotel project is slated to open in early 2017.
The Bohannon Development Company announced in March that it has chosen Ensemble Hotel Partners to develop a new luxury hotel at its Menlo Gateway site in Menlo Park. The new hotel will be part of Marriott’s Autograph Collection.
Roughly a year ago, Redwood City has approved its first hotel development in more than 10 years with the city giving the go ahead for the development of the One Marina Hotel project located at 650 Bair Island Road in Redwood City. The developer of the hotel is OTO Development based in Spartanburg, S.C., and the development will be for 177 rooms and around 5,000 square feet of either conference or retail space.