LaSalle Hotel Buys High-End Conference Center Resort

SANTA CRUZ, CA-LaSalle Hotel Properties has acquired Chaminade, a high-end conference center resort here situated on a 288-acre bluff overlooking the northern end of Monterey Bay and area wineries. The Bethesda, MD-based hotel REIT paid $18.5 million for the 153-room property with 12,000 sf of meeting space. The sellers were Daiwa Investment Corp. LP of Tokyo, a collective of Japanese investment groups, and Tokyo-based Benchmark Tech Corp.LaSalle Hotel Treasurer Raymond Martz tells GlobeSt.com that the $120,000-per-room price tag is “very cheap” for what it’s getting. “This is one of those unique, secluded, high-end secrets with amazing views,” says Martz. “This is a favorite for a lot of the tech firms on the West Coast…and getting another one built would be extremely difficult because the area is very anti-development, very environmental.”Martz declined to discuss average daily rates, average daily occupancy or what the company sees as its cap rate on the investment. In 1999 and 2000, during the tech boom, he says the property performed “phenomenally.” Since the downturn, the project has not performed as well, he says. “We think we are buying this at the beginning of another up cycle,” says Martz. “For hotel performance, 2004 was the story of the East Coast, New York and Washington have been phenomenal; Boston is now on fire and we see that spreading to other coastal cities shortly.”As the Bay Area economy improves, the corporate group demand will improve, says Martz. In addition, he says the company will try to find ways to maximize the weekend leisure component. As well, company officials say a portion of the property may be able to be developed or expanded for residential or other uses. The hotel manager will continue to be Benchmark Hospitality, which also manages LaSalle Hotel’s 500 acre, 298-room Lansdowne Resort in Northern Virginia. The resort is located about 30 miles south of San Jose and 75 miles south of San Francisco. Hotel amenities include the latest in audio-visual and teleconferencing facilities, three upscale restaurants, a newly renovated spa, tennis courts and extensive nature trails. For typical corporate events, hotel rooms can run $500 per night but include food and beverage, says Martz, adding that the rooms will be upgraded with higher-end finishes over the next six months.The Santa Cruz area attracts 4.5 million visitors annually and is known for its mountain wineries, its beaches and Santa Cruz Beach Boardwalk, a seaside amusement park. Other area attractions include Downtown Santa Cruz, Pasatiempo Golf Club, Roaring Camp Railroads, the redwoods of Henry Cowell State Park, and a University of California branch campus.