JC Resorts JV Invests $100M in Terranea Resort

RANCHO PALOS VERDES, CA-New and existing investors have committed $100 million in new capital that will provide for the long-term stability of the 102-acre, 582-room Terranea oceanfront resort developed and owned by Los Angeles-based Lowe Enterprises. The transaction includes an extension of the loans on the property in addition to the new capital commitments by a combination of new and existing investors in a new joint venture with JC Resorts, a San Diego hospitality company with 40 years of resort and golf experience in Southern California. Affiliates of ST Residential LLC hold the loans on the property and are participating in the new capital commitment.

In addition to being the primary lender, ST Residential has acquired the mezzanine loan on the property, according to Robert J. Lowe, chairman and CEO of Lowe Enterprises. “With this new partnership in place, Terranea is well-positioned to take advantage of the continuing improvement in the hotel and residential markets,” the Lowe CEO said in a prepared statement.

Lowe’s announcement of the new financing says that the transaction “effectively eliminates any uncertainties about Terranea following the FDIC takeover of its original construction lender, Corus Bank, the subsequent acquisition of Terranea’s loan by ST Residential, and the challenges resulting from the recession.”

Terranea Resort opened in May 2009 and has performed very well despite the challenging economic environment, according to Lowe. Demand from both group and leisure travel business has increased at the property, the company says. Over the last year, the resort has hosted a number of high profile conferences, including the Wall Street Journal's recent "All Things Digital" conference. Terranea was also the site of a televised wedding on ABC’s The Bachelor. The resort is operated through Lowe’s hospitality management subsidiary, Destination Hotels & Resorts.

The property was developed by Lowe Enterprises with Turner Construction serving as general contractor. In addition to the 360-room hotel and oceanfront bungalows, Terranea offers ownership in 32 private ocean Villas and 50 Ocean Casitas, ranging in size from 1,850 to 2,800 square feet, with prices starting at just under $1.3 million. The resort also features 135,000 square feet of indoor and outdoor meeting and event space, a 25,000-square-foot spa and a nine-hole oceanfront golf course.