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Thursday, Mar 28, 2024
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Broker Says Downtown Hotel Is Up for Sale

Broker Says Downtown Hotel Is Up for Sale

BY CONNIE LEWIS

While many San Diego hotels displayed “no vacancy” signs during the Labor Day weekend, at least one property also posted one saying “for sale.”

Investor and developer S.D. Malkin Properties, Inc., which has offices in San Diego and London, is reportedly looking for a buyer or investment partner for the Hilton San Diego Gaslamp Hotel.

Jeremy Cohen, senior vice president of S.D. Malkin, declined to comment, and a sales price for the K Street complex, including the 282-room hotel, was not listed.

But Alan Reay, the president of Atlas Hospitality Group, a Costa Mesa hotel brokerage, said it is for sale and estimated the asking price at $75 million. He based that figure on a $46 million adjustable rate mortgage, which was taken out in January when the complex was refinanced at 70 percent of its appraised value.

“The Hilton Gaslamp has been running close to 80 percent occupancy throughout the year,” Reay said. “Rooms went for about $150 a night, on average.

“I wouldn’t call it a trophy property, necessarily, but it’s certainly a class-A property, and the highest priced for sale in the county since the Hotel del Coronado sold for nearly $400 million in December.”

The 158,000-square-foot Hilton Gaslamp complex, directly across from the San Diego Convention Center and Petco Park, includes the New Leaf Restaurant and Bar, Lou & Mickey’s Restaurant and Cocktail Lounge, the Artesia Day Spa and some retail shops. An underground parking garage has space for 160 cars.

The hotel, a Hilton franchise, opened in 2000, and 30 guest rooms were added in the fall of 2001. Interstate Hotels, based in Arlington, Va., is the management company.

While sales of major hotels in San Diego have been few in number compared with other California counties in the last couple of years, Reay said local owners have held onto their properties assuming they would increase in value because of the area’s relatively healthy tourism market.

While Reay expects values will continue to climb, he thinks they’ve neared their peak, and more sales of full-service hotels could follow. The renewed availability of investment capital for purchases and hotel construction, which all but dried up following the Sept. 11, 2001, terrorist attacks, could prompt more sales, he added.

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