Trinity, Oaktree Capital buys luxury hotel in Southern California from Hyatt
The Hyatt Regency Indian Wells Resort & Spa near Palm Springs, Calif., has been sold, the second sale of a major Coachella Valley resort hotel since December as the desert region’s hotel sector rebounds from the pandemic.
A subsidiary of Honolulu real estate investor Trinity Real Estate Investments has partnered with Los Angeles-based Oaktree Capital Management to buy the 530-room hotel from 44600 Indian Wells Lane of hospitality giant Hyatt Corp., the joint venture said in a statement. The terms of the contract are not disclosed.
The transaction follows global investor Blackstone’s late 2021 sale of the historic 785-room La Quinta Resort & Club near Palm Springs to a British private equity firm for $255 million, the highest total price. high paid for a Southern California hotel for over two years. years. This deal came to about $325,000 per room.
The sales, along with the return this month of two of the country’s biggest music festivals for the first time since 2019, could be signs of a rebound for the Coachella Valley, where the Greater Palm Springs Convention & Visitors Bureau estimates that a quarter of jobs are related to hospitality and tourism.
Many hotels closed in the early months of the pandemic, along with the Coachella Valley Music and Arts Festival and Stagecoach, its country music counterpart, which typically fill all hotel rooms within 30 miles of their venue. on the grounds of the Empire Polo Club in Indio, have been canceled in 2020 and 2021 due to the health crisis.
About 330,000 hotel room nights were sold in greater Palm Springs in February, an increase of nearly 63% from the same month in 2021, according to CoStar data. Hotel sales volume, led by the La Quinta Resort & Club deal, increased nearly 150% in 2021 from a year earlier in Riverside County, according to a report by Alan Reay, chairman from consulting firm Atlas Hospitality Group, which tracks the California hospitality industry. .
The outlook for the hospitality industry has improved in the United States and investors have taken notice. More than $12.5 billion in U.S. hotel properties traded in the first three months of 2022, the strongest first quarter since 2016, according to John Freitag, Hotel Analyst for CoStar Market Analytics. Investor interest remains strong, continuing the 2021 trend in which CoStar announced total annual sales volume of $50 billion, the highest on record, Freitag added.
The resort is the seventh property acquired by Trinity and Oaktree, who now hold a total of 4,500 rooms across six markets. More recently, the joint venture purchased the 305 rooms in December W Hollywood Hotel at 6250 Hollywood Blvd. in Los Angeles from Bethesda, Maryland-based real estate investment trust Host Hotels & Resorts for $194 million, or about $636,000 per key.
The resort’s purchase reflects “our belief in the growth of the large Palm Springs hotel market and the tailwinds of strong aging and affluent demographics in the Coachella Valley,” John Brady, general manager and head of real estate worldwide at Oaktree, said in the statement.
The sprawling Hyatt Regency Indian Wells Resort & Spa opened in the 1980s as the Grand Champions Hotel, hosting the tennis tournament now known as the BNP Paribas Open. The tournament moved a few miles east in 2000 to the 16,100 capacity Indian Wells Tennis Garden, which is now the second largest outdoor tennis stadium in the world after Arthur Ashe Stadium. of the US Open in Queens, New York.
The upscale resort features 88,000 square feet of indoor and outdoor event space, four food and beverage outlets, nine swimming pools, and a fitness and spa complex. It has undergone several multi-million dollar renovations and upgrades over the years, most recently in 2020 when Hyatt upgraded guest rooms and meeting spaces and built the HyTides Plunge and Desert Twist Lazy River , a water park with two slides.
Trinity and Oaktree plan to spend millions more on upgrades, including another renovation of all rooms and new food and drink offerings. Hyatt will continue to manage under a long-term agreement, the buyers said in the statement.
Chicago-based Hyatt acquired the property in 2018 for $120 million, or $226,415 per room, from Grand Champions LLC, an entity controlled by Colorado Rockies Major League team owner and CEO Richard Monfort. Baseball, according to CoStar.