A partnership between Kawa Capital Management and CL Hotels has acquired Hotel La Jolla in San Diego. The property has 11 stories and 110 guestrooms and is operated by Curio Collection Hilton, which renewed its lease for 20 years. The sales price was not disclosed.
The partnership plans to invest an additional $5 million to $6 million to upgrade the property's lobby, pool, restaurants and guestrooms. The renovation will take two years, and will not disrupt operations. Joao Woiler, a principal of CL Hotels LLC, says that the upgrades will "provide the upscale facilities and services befitting of the area." Woiler expects to see a resurgence in both corporate and leisure travel.
San Diego is a premier hotel market, and is regularly ranked in the top 10 nationally. The market is also expected to recover rapidly from the pandemic. Research from CBRE forecasts full recovery of national hotel occupancy by 2022 and of average daily rate by 2023. While this illustrates a long recovery cycle, it also is an indicator that the hotel market will rebound in the near-term. San Diego is well positioned to outpace the US market in rebounding, with full recovery predicted in 2022.
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In an earlier interview, Brandon Feighner, managing director of CBRE Hotels' Advisory, had a similar expectation of the return on corporate and leisure travel in the market. "We think that San Diego is better positioned than most given the abundance of leisure travel and attractions. Two-thirds of leisure travel in California is from Californians. We are starting to see that early return as things are starting to open up," he said.
Many investors are actually taking the opportunity to buy hotels in the market with the expectation travel will return. In May, Park Hotels & Resorts Inc. entered into an definitive agreement to sell two hospitality assets for combined proceeds of $149 million. The properties consist of the 210-room Hotel Indigo San Diego Gaslamp Quarter in San Diego, CA and the 204-room Courtyard Washington Capitol Hill Navy Yard in Washington DC. Others took the opportunity to complete upgrades. Last October, Lowe and Atlas Hotels opened the doors of the 40-acre, 675-room Town & Country San Diego resort. The multi-million dollar project transformed the property into a mid-century modern mixed-use property. The project has been several years in the making and was designed to appeal to a large swath of travelers, including leisure, business and convention visitors.
Hotel La Jolla is a five-minute walk to the beach and 70% of the guestrooms have an ocean view. The property is near La Jolla Cove, La Jolla Village and Torrey Pines.
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Kelsi Maree Borland
