(EDITOR’S NOTE: According to a source with knowledge of the transaction, the property sold for $65.29 million, or about $266,489 per room.)
CBRE has arranged the sale of the 245-room Courtyard San Diego Downtown Hotel by Marriott to an affiliate of New York City-based Certares Management LLC in partnership with Philadelphia-based HHM.
Michael DiPrima and Diana Simpson with CBRE Hotels handled negotiations for the seller. The sale marks the duo’s eighth hotel transaction in the San Diego metro since June 2021, the most of any investment sales team in the region. In that time, DiPrima and Simpson have facilitated approximately a half billion dollars in hotel transactions in San Diego.
“Right now, San Diego is the greatest hotel market on the West Coast and possibly the country,” said DiPrima. “The metro is seeing more transaction activity than any other region in Southern California, and a lot of that has to do with its booming tourism and leisure activity, as well as the tremendous amount of life sciences and technology development underway.”
Located at 530 South Broadway in downtown San Diego, the historic hotel was originally built as the San Diego Trust & Savings Bank in 1928 and converted into a hotel in 1999. The hotel features a grand lobby with 32-foot-high ceilings, 4,800 square feet of meeting space including the Safe Deposit room with the original 47,000-pound Mosler Safe Company vault door, and 245 guest rooms that recently underwent a $4.5 million renovation. The Courtyard San Diego Downtown is in the heart of the convention, business and leisure amenities in the area.
“Downtown San Diego is undergoing a transformation unlike the city has ever seen,” said Simpson. “What was once a government and leisure-driven market is now growing into a true live-work-play environment. With 4.5 million square feet of office and 8,000 residential units under construction, job growth and quality of life are leading to significant net migration. All these factors are sparking interest among institutional hotel investors, as was the case with Courtyard San Diego Downtown.”
According to Real Capital Analytics, DiPrima and Simpson have negotiated 44 percent of all San Diego hotel sales in the past year. The team’s transactions since June 2021 include Hilton San Diego Mission Valley in June 2021; Hotel La Jolla in September 2021, Courtyard by Marriott Old Town, Fairfield Inn & Suites Old Town, and Estancia La Jolla Hotel & Spa in December 2021; and the Courtyard by Marriott San Diego Gaslamp and Moxy San Diego Downtown/Gaslamp Quarter in May 2022.
The San Diego hotel market had a strong second quarter of 2022 with revenue per available room (RevPAR) exceeding Q2-2019 by 16 percent, according to Kalibri Labs. Occupancy rose to 97 percent of Q2-2019 levels, and the average daily rate exceeded 2019’s levels by 20 percent.
According to a CBRE Hotels Research May 2022 report, the San Diego region’s RevPAR is expected to increase 25.6 percent over 2021 to $122.29 this year and make a full recovery to pre-pandemic levels in 2023.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.