PASADENA, CA-A joint venture between Urban Commons and Brighton Management has acquired the 333-room Sheraton Pasadena Hotel. The acquisition included a 20-year commitment from the hotel to keep the Sheraton flag at the location. The joint venture purchased the hotel for an undisclosed amount.
Urban Commons has acquired 10 hotels in the past three years, investments that have totaled $300 million. The company targets value-add properties in markets that have major growth potential. "Pasadena is located within minutes from the financial district and the property is near old-town Pasadena, so it really has a lot to offer," Nancy Choi, Urban Commons director, tells GlobeSt.com. "This is a great area to help the city with their revitalization process, and with the way the city is growing economically, everything looks very good." Located at 303 East Cordova Rd., the Sheraton Pasadena is in the city's redevelopment district, which has undergone a $150 million renovation. It is also located within 3 miles of major Pasadena attractions, like the Rose Bowl, the Norton Simon Museum and the Huntington Library and Botanical Gardens.
The joint venture was also interested in working with the hotel brand. "We have worked with the Sheraton before. We really like the brand, and we would like to continue expanding with them," says Choi. In keeping with the company's value-add strategy, it definitely plans to make a renovation investment, although Choi says they have not yet determined the investment amount.
This acquisition is further evidence that Pasadena's revitalization is attracting investors, who are making some notable acquisitions. Greenbridge Investment Partners recently acquired the historic Star News Building for $16.5 million. The building was recently renovated and is 100% leased. Perhaps the most notable recent acquisition in the market is the purchase of the 60,771-square-foot Pasadena Plaza by a joint venture between Rising Realty Partners and Silicon Valley tech expert David Sacks. The duo plans to transform the plaza into Pasadena's "tech hub" and draw creative tech industries into the market. With close proximity to Cal Tech and the Jet Propulsion Lab, they have a good shot at success.
These office sector investments aren't surprising considering Pasadena's rather stable office markets. According research from JLL, fourth quarter 2013 vacancy rates in Pasadena were 13.1%, a .7% decrease from Q3 and the lowest vacancy rate in the tri-cities area. The market also had 155,000 square feet of office space under construction at the end of the 4Q. Rents average about $2.47 per foot for a class-A property, and have remained relatively stagnant at that price for the last year.
The Sheraton Pasadena Hotel has a huge corporate customer base. It is typically a destination for corporate conferences, events and group meetings. It has a 12,000-square-foot meeting space and a shuttle that travels within a three-mile radius to popular attractions. The hotel amenities include a heated pool, tennis courts, on-site parking and an on-site restaurant and bar.
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