Radisson Plaza in Irvine Sold to Hotel Investors
A Washington investor group on Friday bought the Radisson Plaza Hotel for an undisclosed price, ending businessman George Yao’s long-running struggle to retain control of the Irvine property near John Wayne Airport.
The hotel, facing a foreclosure sale Monday, was sold to EquiStar Hotel Investors. EquiStar owns nine hotels nationwide and holds equity interests in about 25 other properties.
EquiStar turned over management and operations of the 294-room hotel, which will retain the Radisson name, to its CapStar Hotels subsidiary.
EquiStar plans to pump several million dollars into the hotel as part of an extensive renovation that will include the hotel’s exterior, guest rooms and corporate meeting facilities, said Larry Shupnick, a CapStar senior vice president.
The deal ends a turbulent chapter in the hotel’s history that began in 1989 when an investment group led by Yao paid $7 million in cash and took out a $19-million loan to acquire the Radisson Plaza. During the past year, Yao’s group flirted with bankruptcy and narrowly avoided a planned foreclosure sale.
Yao’s group had been negotiating a settlement with Bank Midwest, a Kansas City institution that held a delinquent $19.3-million mortgage on the property. Shupnick said the deal turned sole ownership of the hotel over to EquiStar.
EquiStar is acquiring the hotel “because it has an excellent location,” Shupnick said.
“We have quite a few other properties near airports that do extremely well,” he said. “And our economic studies show continued growth and an improving economy in Southern California and Orange County.”
The Radisson is poised to share in an anticipated upswing at properties located near John Wayne Airport, said Don Wise, a CB Commercial Real Estate Group Inc. vice president who represented EquiStar in the transaction.
“We’re anticipating that the average daily rate in the airport area will increase from about $93 to about $97 in 1996, and that the occupancy rate will grow from 71% to 73%,” Wise said.
CapStar operates 51 hotels, including the Santa Barbara Inn, the Inn at Morro Bay and nine others in California. In Orange County, it operates the Quality Suites in Santa Ana and a Residence Inn in Orange.
