Lowe has allocated $29.5 million to the project from its recently closed, $52 million Destination Hospitality Development fund, which it opened to investors about a year ago.
Brad Howe, a senior vice president at Los Angeles-based Lowe, tells GlobeSt.com the development is tentatively named the Blackhorse Hotel and will include an equity investment from Lowe as well as the funds from its investors, who include institutions and high net worth individuals.To be designed by Palo Alto, Calif.-based Hill Glazier Architects and built by McCarthy Construction, the hotel is scheduled to be completed in 2004.
"San Diego has remained very strong throughout what was a very difficult year in the hotel business," Howe tells GlobeSt.com. He says the company expects the hotel market will rebound significantly by the time the new hotel opens.
Hotel industry consultant Alan X. Reay, president of Atlas Hospitality Group in Costa Mesa, Calif., tells Globest.com the new hotel's location in one of the country's strongest markets should bode well for the new development.
"The hotel industry in the past year has had a hard time, especially the higher end resort properties, but having said that, this is a location that should work," Reay says.
The hotel industry has suffered from the slowing economy, curtailed business and personal travel since Sept. 11, and "an explosion of resort developments in Southern California," Reay says, but he tells GlobeSt.com that the La Jolla location, San Diego's diverse economy, and the new hotel's construction costs all work in its favor.
"At 210 rooms and $60 million, that's $285,000 per room in construction costs, which is a number that should work out well in that location," he tells GlobeSt.com.
Lowe has an ownership interest in the Sunriver Resort in Central Oregon and the Wild Dunes Resort in the Charleston area and has completed significant development and redevelopment at both properties. Lowe also currently operates 30 independent, luxury and upscale hotels, resorts and golf clubs in the United States and United Kingdom.
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