AC Marriott is First Marin Hotel in Two Decades
There is definitely pent-up demand for new product as occupancy in the submarket has been above 78% since 2014 and for each of the last six years, room demand increased 2% and ADR increased 6%-plus.
SAN RAFAEL, CA—AC Marriott hotel is Marin County’s first major hotel to be built in two decades. The 140-room hotel will be located in downtown on the corner of Fifth Avenue and B Street, in the county’s nexus.
“This will be the first new hotel in the market in more than a decade, and there is definitely pent-up demand for new product,” John Nelson, CBRE executive vice president, tells GlobeSt.com. “Occupancy in the submarket has been above 78% since 2014 and in the last six years, demand for rooms has increased 2% annually while the average daily rate has increased more than 6% annually.”
Construction of the hotel will begin immediately and it is anticipated to open the third quarter of 2021. CSI Construction will serve as the general contractor for the project.
CBRE has arranged $43 million in non-recourse construction financing for the development of the hotel. Nelson and David Kaim, both in CBRE’s San Francisco office, arranged the financing on behalf of the sponsorship, Monahan Parker Inc. The floating-rate financing was provided by ACORE Capital, a commercial real estate finance company.
“This asset is in one of the premier locations in Marin County, and as a result, garnered interest from numerous capital sources,” said Nelson. “All potential capital sources were attracted to the high average hotel occupancy market and experienced sponsors/developers. The winning lender tailored their loan to fit the sponsor’s needs at a very compelling cost of capital. The financing was a perfect fit for both the sponsor and the capital provider.”
Marin County continues to flourish due to BioMarin’s expansion and new Sonoma Marin Area Rail Transit/SMART train, which provides access to San Francisco. In addition to strong corporate demand, Marin County has high leisure demand, being a destination for outdoor recreation with weather that allows visitors and residents to enjoy biking, hiking, sailing, kayaking, agri-tourism and many other activities all year round, as well as being centrally located between San Francisco and the Wine Country to the north.