By Jon Peterson
Los Angeles-based Gaw Capital Partners is looking to trade an iconic asset it owns in downtown Oakland. The investment firm placed up for sale the 500-room Oakland Marriott City Center hotel property. The company and its brokers have not disclosed the asking price on the property, and the pricing may not necessarily follow the recent trends seen across California hotel markets.
Gaw Capital declined to comment when contacted for this story. The listing agent that the firm picked to work on the sale of the property is the San Francisco-office of Eastdil Secured.
The property owner has held title to the property for well over four years. It had purchased the property for $143 million, or $289,000 per room, in May of 2017, as stated in public records. There was a new first mortgage placed on the property in July 2019 for $100 million through Natixis, a French investment bank.
Sources that track the sale of hotels in California believe that the property may be sold for less that what Gaw Capital paid to acquire it. The reason for this is that the Oakland Marriott City Center is considered a convention hotel. This segment of the hotel market has been hit hard ever since the start of the pandemic, and there seems to be no indication when these types of hotels may turn around.
Oakland Marriott City Center asset is a full-service property. It is considered to be a higher upscale hotel property. It was first developed in 1983 and was renovated in 2011, according to industry sources. The asset is located at 1001 Broadway in Oakland between 10th and 11th Streets. It is directly connected to the George P. Scotlan Memorial Convention Center where there is 64,100 square feet of event and exhibit space and a 575-space parking facility.
Unlike the convention hotel business, other hotel segments seem to be doing really well. As an example, the National Council of Real Estate Investment Fiduciaries (NCREIF) just recently announced its 2021 fourth quarter returns for its NCREIF Property Index. The total return for the fourth quarter was 4.64 percent, which was up from 1.83 percent for the third quarter. This performance was better than retail and office and only lagged behind industrial and apartments.