Hawaii Investor Buys Pleasant Hill Hyatt House for $45MM

Hawaii, San Francisco, Bay Area, The Shidler Group, Hersha Hospitality Trust, Hyatt House Pleasant Hill,

Hawaii, San Francisco, Bay Area, The Shidler Group, Hersha Hospitality Trust, Hyatt House Pleasant Hill,

By Vladimir Bosanac

The hotel sales market in Northern California may be showing signs of maturing, according to some industry reports, but interest in Bay Area hotels is still there. On June 12, 2017, a Honolulu, Hawaii-based investment company, The Shidler Group, through two transactions purchased the 142-room Hyatt House in Pleasant Hill for a total of $45 million, according to public documents. That would bring the per room price to roughly $316,900. One transaction was for the land only, for which Shidler paid $9 million, while the remaining $36 million were spent for the building and other improvements. The seller was Hersha Hospitality Trust, the Philadelphia, PA national hotel owner.

The Shidler Group is an equity and debt investor in US commercial properties and portfolios, according to its web site. The company was formed in 1972, and it invests through a number of entities in over 2,000 properties across the country comprising over 150 million leasable square feet. It describes itself as a specialist in creating and financing leasehold estates on 99-year ground leases and the resulting leased fee estates in the underlying land. The company has completed over 140 such transactions, according to its web site.

The company did not respond to a request for comment by the time of this publishing.

The Hyatt House Pleasant Hill is located at 2611 Contra Costa Blvd. It features 142 suites with full kitchens, along with 1,839 square feet of meeting space. It is in close proximity to the Shadelands Office Park, Concord Gateway Business Park and downtown Walnut Creek.

According to a February 2017 Atlas Hospitality Group California Hotel Sales Survey for Year-end 2016, the Northern California hotel market saw a decrease in overall transactions by roughly 25 percent. In 2016 there were 149 transactions compared to 198 a year earlier. The average price per room also decreased, but only slightly. It was $159,808 in 2016 compared to 160,022 in 2015.

Atlas forecasts the number of sales of hotels in Northern California in 2017 to continue to decline between 12 percent and 15 percent, with a median price also shrinking by 10 percent. The report also forecasts that financing will be a challenge as interest rates continue to rise in anticipation of greater risk, making the lending process more stringent in loan underwriting.

West Coast Commercial Real Estate News