LaSalle Bags Hilton San Diego for $85M

SAN DIEGO-LaSalle Hotel Properties, a Bethesda-MD-based REIT, has made a major splash in the local market with the acquisition of the Hilton San Diego Gaslamp Hotel. LaSalle paid $85 million for the 282-room luxury hotel, which is located in the Downtown area across the street from the San Diego Convention Center. LaSalle acquired the property from locally based SD Malkin Properties Inc., who developed the hotel in 2000.Officials with LaSalle were excited about the tourism potential the city provides. “The San Diego hotel market has outperformed through the economic downturn, benefiting from healthy convention, meeting and leisure travel. We expect San Diego to continue to be one of the best performing markets in the US” says Jon Bortz, chairman and chief executive officer of LaSalle Hotel Properties. The hotel is part of a mixed-use complex known as the Bridgeworks that includes retail, restaurants, parking structures and a full-service spa. As part of the buy, LaSalle takes on the hotel, a 116-seat upscale restaurant named New Leaf and the 4,600-sf Artesia Day Spa, while SD Malkin will retain ownership of the Fifth Avenue retail component, which is anchored by Lou & Mickey’s Restaurant.The 282 guestrooms and suites are contained in two separate buildings. The main tower includes 252 guestrooms, while Enclave tower contains 30 luxury suites. The hotel contains approximately 7,800 sf of interior meeting space, located in eight conference rooms. There’s an additional 31,800 sf of meeting space located outdoors on the property. LaSalle has chosen Memphis-based Davidson Hotel Co. to manage the hotel and surrounding property.It’s the second major property for LaSalle in the metro area. The company also owns Paradise Point Resort and Spa in Mission Beach. In all, the company owns 20 luxury full-service hotels, totaling approximately 6,600 guest rooms in 15 markets throughout the country.For SD Malkin, the sale is a chance to look at new opportunities in the area. “The sale of the Hilton Gaslamp will allow us to concentrate our full resources on other important projects in the San Diego area,” says Jeremy Cohen, senior vice president and director of US development for SD Malkin. The company is one of three finalists vying to build a beachfront resort hotel in Oceanside. On another front, SD Malkin is looking at the opportunity for developing a boutique hotel on a site that it owns at Fifth Avenue and E Street in the northern end of the Gaslamp Quarter.