One of Southern California's most luxurious resorts, the Montage Laguna Beach, has been bought for $360 million by a Chicago real estate investment trust in one of the priciest hotel deals in years.
At a cost of $1.4 million per room, the deal "shattered the price barrier for California hotels by a wide margin," hotel consultant Alan Reay said. Only hotels in Hawaii and New York have traded for more per room, he said.
Strategic Hotels & Resorts Inc. bought the 250-room Montage Laguna Beach from an affiliate of Ohana Real Estate Investors, a Redwood City investment firm funded by Pierre Omidyar, the founder and chairman of eBay. Ohana still owns the Travelodge Laguna Beach and the Montage Beverly Hills, among other properties.
Montage Hotels & Resorts will continue to operate the upscale Laguna Beach inn, which opened in 2003 on South Coast Highway. It has a meeting rooms, a spa and a five-star rating from Forbes. The craftsman-style buildings stand on a 50-foot bluff overlooking the Pacific.
"We are thrilled to acquire Montage Laguna Beach, a truly iconic luxury hotel located on one of the best resort settings in the continental United States," said Raymond L. "Rip" Gellein, chairman and chief executive of Strategic Hotels & Resorts.
"The Southern California market generally, and the coastal Orange County market specifically, have been among the highest-rated markets in the country and are poised to continue their strong growth," Gellein said.
Consultant Reay of Atlas Hospitality said stakes in the Hotel del Coronado in San Diego County have traded at values of more than $1 million per room in recent years, but only a handful of properties including the Four Seasons Resort Hualalai in Hawaii and the Waldorf Astoria New York sold for more than $1.4 million per room.
The Montage Laguna Beach's location in one of California's premier resort cities and the potential difficulty of getting similar competing hotels approved by public officials make the Montage especially valuable, Reay said.
Strategic Hotels & Resorts expects the Montage to pull in an average daily rate of $600 per room this year, the company said.