Ohana Real Estate Sells Montage Healdsburg for $265M

Ohana Real Estate has sold the Montage Healdsburg to Sunstone Hotel Investors for $265 million. The newly constructed hotel is located in Sonoma County and features 130 rooms. The impressive price tag equates to $2 million per room, setting a new standard for US luxury hotel transactions, according to the seller.

This is the second time that Ohana has sold a hotel for $2 million per room. The first was in 2019 when the investor sold the Montage Beverly Hills for $2.1 million per room. At the time of the deal, the price was the highest price-per-key hotel sale in the nation. In the case of the Montage Healdsburg, the pricing is especially impressive considering the dislocation in the hotel market caused by the global pandemic. James Cole, Head of Asset Management at Ohana, says the deal illustrates strong investor interest for quality hotels and the early stages of the market recovery.

Despite the pandemic, Ohana remains bullish on the hotel sector, believing that it benefits from attractive supply-demand dynamics. Through the pandemic, it has been an active buyer of hotel product, and it intends to remain an active buyer this year. However, it is active in more than just the hotel sector. As part of this transaction, Ohana has maintained ownership of adjacent residential development sites and plans to develop custom home sites affiliated with the property.

Although Ohana is bullish on the hotel sector, distressed hotel assets continue to come to the market. Earlier this month, JLL’s loan sales and hotels and hospitality teams announced they retained by a CMBS special servicer to market the sale of an $80 million, non-performing loan portfolio that includes six loans collateralized by full limited-service hotels totaling 1,022 keys across five states. The portfolio includes two full-service and four limited-service hotels located in Lexington, Kentucky, Springfield, Virginia, King of Prussia, Pennsylvania, Indianapolis and Portage, Indiana, and West Coxsackie, New York. This is just one example. Recent research from Real Capital Analytics found that 8% of hotel sales since the start of the pandemic involved at least one distressed asset.

Montage Healdsburg is a sustainably designed property on 258 acres featuring multiple pools, a full-service spa and several restaurants throughout the property. The hotel is also has onsite vineyards.