By Meghan Hall
The Toll House Hotel in Los Gatos, which opened its doors in 1983, has become a popular spot amongst locals looking for a getaway close to both the hustle and bustle of the Bay Area and the tranquility of the Santa Cruz Mountains. In a two-property transaction that closed this week, Cranston, R.I-based Procaccianti Cos. purchased the hotel, located at 140 S. Santa Cruz Ave., for $43.5 million, or $378,000 per room.
According to The Mercury News, who first reported the transaction, the acquisition of the 115-key Toll House Hotel is part of a deal that will enable Procaccianti to also purchase The Lodge at Tiburon, a high-end, 103-room California Craftsman-style hotel located in Marin.
TPG Hotels & Resorts, also associated with Procaccianti Cos., will manage and operate both hotels. According to its website, TPG Hotels & Resorts operates as both an investor or straight third-party operator and focuses on service hotels, resorts, and upper scale hotels.
Procaccianti Cos. first acquired its hotel brand in the 1980s and has a current portfolio of 60 hotels nationwide and includes some of the hospitality industry’s largest brands, such as InterContinental, Hilton and Marriott. With the acquisition of the Toll House Hotel and The Lodge at Tiburon, the firm and its affiliate now will help to operate four hotel assets in California. One of them, the AC Hotel by Marriott on Santa Clara Street in San Jose, which opened in 2017. The 210-key hotel recently traded hands in April when Younkers, N.Y.-based AVR Realty purchased the hotel for $95.4 million, or $425,000 per room.
According to a recent report released by Atlas Hospitality Group, California’s hotel market at large continues to do well, and will remain strong as long as the economy remains stable and interest rates remain low. The Golden States’ median price per room is at an all-time high, at $130,025 per room. This is a 12.7 percent increase over the same period in 2018, and is up by 146 percent over the course of the market cycle.