The Hilton La Jolla Torrey Pines resort was recently acquired for $165 million by JRK Property Holdings, a Los Angeles-based investment firm. This is the biggest hotel sale in San Diego so far this year, according to San Diego Union-Tribune.
JRK, which primarily focuses on multi-family housing, was drawn to San Diego due to its reputation as a thriving hospitality market. But the real attraction was the Hilton property itself, given its prime location near the coast, said JRK’s executive Shaan Bhatia.
The hotel’s last major renovation was a decade ago, but it has since undergone “patchwork” refreshes, said Bhatia. JRK plans to invest $30 million in property upgrades in the future, although specific plans are still being finalized.
The sale of the hotel was facilitated by Braemer Hotels and Resorts, which will use the proceeds to pay off its remaining debt maturities in 2024. JRK will not own the resort property itself, as the Hilton Hotel sits on city-owned land. The hotel has a 63-year lease remaining with the city, Bhatia said.
While high interest rates have slowed down hotel sales statewide, JRK was able to secure more favorable loans through the commercial mortgage-backed security market. They contributed one-third of the equity and took out a loan for the remaining balance, Bhatia explained.
Despite the recent sale, the hotel continues to perform well financially. It is considered a strong long-term investment, especially considering the nearby life sciences corridor. The property’s prime location near the coast and its affiliation with the Hilton brand make it a desirable destination.
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