RANCHO MIRAGE, CA-Treasure Mountain Holdings LLC, a consortium of American and Chinese investors, has acquired the 120-room Hilton Garden Inn located on Highway 111 here in Rancho Mirage, CA. The location is the market's main commercial route, in the Coachella Valley community of Rancho Mirage.
Although the sales price was not disclosed, we did learn that the property, which was widely marketed by CBRE Hotels, garnered heavy interest due to its prime Rancho Mirage location, Hilton brand and quality of construction.
Built in 2002 and situated on over 3.3 acres, the hotel is just a short walking distance to The River in Rancho Mirage, a 245,000-square-foot open-air lifestyle center offering upscale retail, dining and entertainment.
Rod Apodaca and Bob Kaplan of the Newport Beach office of CBRE Hotels represented the seller, HAS Holdings LLC, an affiliate of J Street Hospitality Inc.
Tony Muscio, SVP of Jones Lang LaSalle's Hotels & Hospitality Group, tells GlobeSt.com that as a result of the recession in conjunction with increases in room supply in the Greater Coachella Valley, RevPAR in the Palm Springs lodging market declined in 2008 and 2009 by 11.6% and 18.8%, respectively.
“Following a 9.5% RevPAR gain in 2010 contributed by a 7.5% ADR increase, performance of the lodging market continued to improve substantially, achieving 2011 occupancy and ADR increases of 8.8% and 5.2%, respectively, which led to a 14.5% RevPAR growth,” he says. “As occupancy began to stabilize in 2012, the Palm Springs lodging market pushed rate, achieving ADR gains of 5.0%. As a result, RevPAR increased 3.4% to $69, approaching the 2007 peak level.”
Muscio adds that “market recovery continued into 2013 with year-to-date through July RevPAR growth of 1.1% over the same period in 2012.”
And according to a recent national hospitality report from Marcus & Millichap, a solid, though muted, pace of economic growth will drive improvement in national hotel performance in 2013. Nationwide,
hotels are riding positive momentum early in the second half of 2013. The outlook for the sector remains upbeat through the second half of the year as the economic momentum, despite hurdles, remains sturdy and development remains contained, says the firm.
In terms of investment, Marcus & Millichap says that more capital is flowing into the hotel sector and investors enjoy greater access to financing, triggering a significant jump in sales of branded hotels over the past year. More than 69% of the transactions over the past year involved assets in the economy, midscale, upper-midscale and upscale segments, up from roughly two thirds in the prior year, says the firm. Sales of upper-upscale assets surged over the past year and dollar volume jumped nearly 70% as several transactions topped $100 million. Marriott, Hilton and Embassy Suites were among the most common brands traded and average deal size approached $50 million, signaling a strong institutional presence, says Marcus & Millichap.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
