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HEI Hospitality Acquires Hilton Mission Valley Hotel

SAN DIEGO-The Norwalk, CT-based firm pays an estimated $45 million for the 351-room property. The company plans to invest approximately $9 million in renovating the property.

By Daniel D. Williams | Updated on March 28, 2005

SAN DIEGO-Norwalk, CT-based HEI Hospitality has made another Southland play. After acquiring the 393-room Hilton Long Beach in January for $77 million, the company has added another Hilton to its portfolio with its buy of Hilton Mission Valley Hotel in San Diego. Financial considerations were not disclosed, but estimates have the deal at $45 million for the 351-room property. HEI plans to invest approximately $9 million in renovating the property. The upgrades will take place over the next 12 months. This added capital would place the investment at roughly $160,000 per room, according to Alan X. Reay, president of Costa Mesa-based Atlas Hospitality Group. Reay tells Globest.com that the Long Beach price was driven up by a 5.6-acre site that was included in the sale. The parcel has since sold for some $18 million, bringing the two properties more in line on a per room basis.As for the San Diego hotel, HEI acquired the property from Mission Valley Associates, who originally developed the site in 1987 as a Doubletree and converted it to a Hilton in 1992. The 13-story hotel counts 421 parking spaces, 20,000 sf of meeting space, a restaurant and a sports bar. The hotel employs about 200 people.The sale was arranged by Bob Eaton and Mark McDermott of Colliers International Hotels San Francisco office and Bob Kaplan of the group’s newly opened Southern California office in Irvine. Kaplan tells Globest.com that the seller of the property “consists of many partners with various interest and estate plans.” He expects the previous owners to pay their taxes on the sale and split up the association.Reay adds that the privately held HEI raised more than $250 million of equity for value-added hotel buys nationwide last June. “Their plan is to buy 200- to 500-room hotels throughout the country,” Reay says.

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