The natural, year-round beauty of Lake Tahoe has for decades attracted visitors from around the world and in droves from Bay Area cities. Now, one of the region’s most prominent, and wealthiest, executives has acquired two parcels in Incline Village, Nev., for a total of $345 million, according to public documents recorded in Washoe County. An entity associated with Larry Ellison purchased the Hyatt Regency Hotel located at 111 Country Club Dr. and an adjoining parcel on 995 Lakeshore Blvd. The latter parcel is a lakefront property of around 8.5 acres with twelve cottages and the main building, while the hotel is a 12-story, 422-room hotel just across the street on Lakeshore Blvd.
The seller of the property was the Chicago-based Hyatt Corporation, and the sale closed on September 3rd.
While Mr. Ellison’s plans for the property were not clear at this point in time, the Oracle CEO already owns another hotel in the Northern California region. In 2015, he purchased the 86-room Epiphany Hotel located at 180 Hamilton Avenue in Palo Alto for $71.6 million, or just over $832,000 per room. The following year, Oracle bought the 476-room Marriott Hotel in San Mateo for $132 million, or just over $277,310 per room. This second purchase was likely an investment made for the company’s traveling employees.
This most recent sale is another example of huge investment activity in hotel properties across the West Coast markets. While this hotel is in Nevada, the Lake Tahoe market, in general, has seen a tremendous amount of interest from visitors and those seeking to permanently move there since the beginning of the COVID-19 pandemic. Similarly, interest in destination hotels and places to get away from home has increased over time, which has resulted in an unprecedented growth in hotel sales with total dollar volume up approximately 450 percent, according to a recent industry research report by Atlas Hospitality Group.
“You sort of understand record numbers on record sales when the market is doing fantastic, like when it was in ’17 and ’18, but to see these kinds of numbers after going through the really big downturn of the COVID-19 pandemic…we’re comparing numbers to every survey we’ve done in the last 20 years, and we’ve never had this amount of dollar volume in transactions, and it’s up not just a small amount, it’s up a substantial amount,” said Alan Reay, president of Atlas Hospitality Group, a hotel industry research group based in Irvine, Calif.
One of the reasons for this rise in interest also comes from the industry’s expectations that the recovery will be robust and that destination hotels, along with convention-driven hotels, will have a competitive advantage as we go into 2022.
“None of the hotels that have transacted make any economic sense on the current financials, and all of the convention center hotels, we know they are going to lag in getting back to normal,” Reay said. “Here you have this kind of velocity in terms of hotels trading…They’re seeing this coming back v-shaped, and they’re looking at 2022 being back to 2019 numbers.”