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Pierpont purchase caps hotel investment spree

By Dana Olsen on September 21, 2012.

A Los Angeles County-based hotel management firm is betting more than $30 million on the Ventura County hotel market, with its purchase of the Pierpont Inn Spa last week bringing the company’s total number of properties in the region to six.

Brighton Management, a real estate firm headquartered in Diamond Bar, purchased the historic Pierpont Inn for $6.5 million at an auction held Sept. 14. The acquisition comes two months after the company said it was in the process of buying two troubled Marriott properties in Oxnard out of foreclosure. Brighton bought the Courtyard by Marriott Oxnard on East Esplanade Drive for $11.4 million in a deal that closed on Aug. 1, and it’s part of a group that’s purchasing the Residence Inn by Marriott on Vineyard Avenue.

“We love Ventura,” Michael Schaefer, senior vice president of full service hotels at Brighton, told the Business Times. “We’ve been very successful in the area, so we want to keep our eye on the winning formula.”

The real estate company also owns Country Inn Suites — soon to be rebranded as a Holiday Inn Express — in Port Hueneme, which was lender-owned when Brighton bought the hotel in July. That hotel had an estimated value for tax purposes of $9.2 million in 2011, according to county property records. Brighton has owned Four Points by Sheraton in Ventura Harbor and Holiday Inn Express in Ventura for the past six years.

With half a dozen Ventura County properties under its belt, Brighton is focused on marketing the region as a tourism destination. “We like the county, and we also like business opportunities,” Schaefer said. The hotel management company is branding the coastal county between Santa Barbara and Los Angeles as “the real California,” he said.

Schaefer said Brighton has had its eye on the Pierpont Inn, a 77-room hotel set on 6.2 acres on Sanjon Road, for the past six years. The hotel went on the market in January for $8.5 million, an asking price that was two million dollars more than it fetched at auction nine months later. “We think we got a great deal,” Schaefer said. “The Pierpont is one of the treasures of Ventura. With a little TLC, there’s opportunity to bring life back to the hotel.”

There’s no word yet on whether Brighton will replace the hotel’s management staff, he said.

Historic hotel

It’s been more than 100 years since Josephine Pierpont commissioned an architect to design the hotel bearing her name. Since the Pierpont Inn was built in 1910, it’s had a storied history.
While the coastal Craftsman-style hotel was once a favorite getaway for presidents and movie stars, it has struggled to recapture its identity in the twenty-first century. Brighton’s purchase marks the fourth time the Pierpont Inn has changed hands since 1998.

Most recently, the Patel and Panchal families sold the Pierpont Inn for an estimated $12.8 million in 2009 to a family trust involving Grace Ahn. At that time, the hotel was listed for as much as $16.5 million, $10  million more than Brighton paid for it three years later.

According to court documents acquired by the Business Times in 2011, the Pierpont started to struggle when the Ahn family took over ownership. Starting in January 2010, 11 lawsuits were filed against Pierpont Group LLC in Ventura County Superior Court. Most of them involved payment disputes with suppliers and employees.

In July 2011, the Garrett Family Trust — which public documents indicate had retained a substantial second trust deed to the property at the time — filed a notice of default against the Ahn family because they had failed to repay one of the loans used to buy the hotel. According to court documents, the Garrett Family Trust had the right to sell the property in a court proceeding if the hotel’s owner didn’t repay the loan within three months.

The hotel officially went up for sale for $8.5 million in January 2012, two months after the Ahn Family Trust and trustee Grace Ahn filed for bankruptcy protection. It was initially listed on the commercial real estate market until the Los Angeles Bankruptcy Court ordered it to go on the auction block.

The auction was originally set to take place in June, but was rescheduled several times. Marcus Millichap, a national commercial real estate brokerage firm, handled the auction.

Jim Luttjohann, former executive director of the Ventura Visitors Convention Bureau, said in 2009 that the Pierpont still has the potential to be an attractive destination. “It should be one of our highest-demand hotels in the city because of its very special and unique character. It needs to be managed and marketed with that philosophy,” he told the Business Times then.





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Moscow’s Hotel Metropol sold at auction

By JIM HEINTZ
Associated Press

MOSCOW (AP) – Michael Jackson slept there. Vladimir Lenin harangued Bolsheviks there. Over the past century, the Hotel Metropol has seen the extremes of Russian life, from austere revolutionary fervor to flashy pop indulgence.

The hotel was sold Thursday for $275 million – slightly more expensive than the starting price of $272 million – after an auction organized by the Moscow city government as part of its privatization program.

The buyer was Azimut, a major Russian hotel chain that rented the Metropol from the Moscow city government, Russian media reported.

Moscow, with a perpetual shortage of hotel rooms and a business culture that adores ostentation, is an attractive market for high-end hoteliers and the Metropol offers plenty of curb-flash.

Situated catty-corner from the Bolshoi Theater and an easy stroll from Red Square, the location is prime for any guest who wants to feel in the very center of the city’s heaving action.

It’s one of Moscow’s most distinctive buildings as well, a cheery Art Nouveau confection in a city where buildings mostly seem to glower. Although at six stories it’s one of the city center’s more low-rise structures, it stands out with sinuous curves, friezes of women en deshabille and bands of brightly colored majolica tiles. Several elaborate mosaics top the building, the most noted being Mikhail Vrubel’s “Princess of Dreams,” showing a dying knight sailing through a crashing sea to a vision of his beloved.

Then, there’s the historical cachet. When it opened in 1901, it was a paragon of Russians’ growing prosperity and confidence, but 17 years later took on a far different role. When Bolsheviks decided to move their government from St. Petersburg to Moscow, the hotel was appropriated to become the Second House of the Soviets.

A large plaque on the exterior notes that in 1918-19, Lenin “many times gave reports and speeches at sessions and party congresses” in the hotel and chatted there with members of the “prodotryad,” armed squads of workers who forcefully appropriated food from the bourgeoisie. Another plaque commemorates a 1921 meeting in the hotel that resulted in a friendship agreement with Mongolia.

In the chaos of World War II, the Metropol became home and office for almost all the foreign journalists allowed to work in the USSR. “Gloomy and cavernous, Mother Metropol was like a college fraternity house” during that time, Whitman Bassow wrote in his book “The Moscow Correspondents.”

The auction winner will get all that, but won’t get the hotel’s elaborate array of antique furnishings and paintings. How much of that might be available for separate purchase is unclear. Natalya Bocharova, head of the city property department, said this month that an array of objects from the hotel will be turned over to museums.

The furnishings are a major part of the hotel’s appeal. Jackson, during a 1993 stay, reportedly was so enamored with a lamp featuring a bear figure that he agitated unsuccessfully to buy it.

Despite its storied history and reputation, hotel review websites suggest the Metropol’s rooms often are in need of spiffing up. Tikova said privatization should ensure the hotel gets an upgrade.

“It allows for more efficient management, it allows timely renovations,” she said.

____

Oleg Yuriyev in Moscow contributed to this report.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Struggles for Hotel Industry Not Over Yet


Struggles for Hotel Industry Not Over Yet


By Desiree Parker


Saturday, July 21, 2012

Three local hotel properties have changed hands this month and others are for up sale or auction – all indications that recovery is still not happening for the local hotel industry.

The recent sales of properties including the Williamsburg Hotel and Conference Center, the Lexington George Washington Inn and Conference Center and the Days Inn Hotel on Bypass Road are not unusual happenings in the Historic Triangle, which has seen its share of hotel and motel properties change hands. The amount of movement in recent years, though, is an indication that long-term low occupancy, a sluggish economic recovery and lower property values are still taking a toll on the local hotel industry, according to the head of the local lodging organization.

The Williamsburg Hotel and Conference Center, formerly the Marriott Hotel Williamsburg, was purchased this week by a private investment group for an undisclosed amount and will convert to a Double Tree by Hilton brand after a $7.5 million renovation, according to a press release.

The property was assessed in 2010 at $20.1 million; its most recent assessment was $12.6 million. It was purchased in late November last year for $20.1 million, according to James City County property records.

The Lexington George Washington Inn and Conference Center, which sold at auction to the note holder in May for $795,000, was purchased this month by Merrimac Partners LLC for $1.5 million. The property is now valued at $3.1 million, according to York County property records, down from $4.9 million in 2010.

Also this month, the Days Inn Hotel on Bypass Road was sold to Southeastern Virginia Investment Properties LLC for $1.2 million. The hotel was on the market from September 2008 through late 2010, according to commercial real estate site LoopNet.com; it is currently valued at $2.7 million, down from $4 million in 2010.

There are other local hotels and motels looking for buyers. The Crowne Plaza Williamsburg is set for auction next week. Other properties currently listed for sale (according to LoopNet) include the Williamsburg Clarion Inn and Suites, the Pineapple Inn and Housing Center, the Princess Anne and the Quality Inn on Bypass Road.

LoopNet also indicates that many other hotel and motel properties have been on the market within the last few years.

Williamsburg Hotel Motel Association Executive Director Priscilla Caldwell said many factors are likely contributing to the number of properties currently trading hands. “The economy is still in recovery, so businesses continue to be affected by it,” she said.

“The economic climate in the region is tenuous and the situation for the local lodging industry delicate.”

Also, slipping property values make it harder for hoteliers to keep their properties up-to-date. “Real estate values are depressed commercially, [as they are] residentially, and equity has decreased for many to the point that some properties cannot refinance in order to improve cash flow, which could allow them to reinvest some in their properties, making them more competitive,” Caldwell said.

Hoteliers in the area have long said that an average occupancy rate 58 percent is what they need to make a decent profit, so that is their target (read a story on that here).

The 12-month average occupancy rate in Williamsburg last year was 40 percent. Auction information on the Crowne Plaza property lists its occupancy at just under 44 percent.

“Demand has been in decline here with a few exceptions for many years, compounding the challenges,” Caldwell noted, echoing concerns hoteliers have had for years about consistently low occupancy rates.

Some hotels have moved under the umbrellas of large national chains to get help with marketing and to pick up brand-loyal customers, Caldwell said. “Switching flags has been a strategy in the hospitality industry for years, as hotel owners reposition their offerings to capture more of a market segment… individual hotels may benefit from a loyalty program driving guests to their properties, as well as gaining access to other built-in infrastructure.”

Local motel the Knights Inn, formerly The Quarterpath Inn, is a good example of this sort of switch. Owner Doug Pons, who is also a member of Williamsburg’s City Council, recently took on the Knights Inn flag and cited many of the same benefits as reasons for the change.

As for how to fix the problem, Caldwell believes that working on a more collaborative approach to marketing the area would be a step in the right direction. “A cohesive approach to developing our travel and tourism product and marketing the destination that engages the many stakeholders to maximize all of our area’s resources would help attract more overnight visitors,” she said.

The area’s regional marketing group recently approved a plan to reorganize the Greater Williamsburg Chamber and Tourism Alliance into an organization that is intended to help unify the brand and reduce some redundancies in local marketing and be slightly more inclusive of other tourism groups.

Head of Busch Gardens and Chair for the regional marketing group Carl Lum summed up the drive to change tourism marketing in the area in June when he told WYDaily, “I don’t want to rush anything, but I have a sense of urgency. Time is not our friend… we’ve got to grow the tourism business here, otherwise we’ll have problems.”

 

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+6


#2
judy
2012-07-21 09:17
Carl – WE ALREADY HAVE A PROBLEM! :o

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Oceanfront Hotel in Palm Beach Shores Hits the Auction Market

/PRNewswire/ — The upswing has arrived and oceanfront real estate in South Florida seems to be the item on everyone’s wish list. The seller for this oceanfront hotel, the Seaspray Beach Resort, has decided to auction the property on June 8th and has engaged Fisher Auction Company to do the job. With wealthy foreign and domestic buyers rapidly depleting available inventory at record high prices, oceanfront real estate has become the hottest ticket in town. This influx of capital has oceanfront hotels experiencing a similar phenomenon with record high occupancy and rates. Investors, hoteliers and developers are scouring the coast for oceanfront real estate but are coming up short. There are simply too few available premier sites to meet the growing demand.

(Photo:  http://photos.prnewswire.com/prnh/20120425/FL94618)

Regarded as one of the best kept secrets in Florida, the pristine Town of Palm Beach Shores is surrounded by water on three sides and sits nestled between the world-famous Town of Palm Beach and the exclusive Singer Island, home to the new Ritz-Carlton Residences. Palm Beach Shores is also the home of the Seaspray Inn Beach Resort, a fully operating, 51-room hotel, located at 123 South Ocean Avenue, with breathtaking vistas of the Atlantic Ocean.

As Palm Beach Shores’ only oceanfront hotel, the Seaspray Beach Resort sits on over half an acre of premier oceanfront land and is just steps away from the Marriott Vacation Club’s Timeshare Resort and ST Residential’s ultra luxury condominium, Dolcevita.  

Buyers can choose to make use of the 50 existing hotel suites or instead, may opt to capitalize on the already approved zoning for approximately 50,000 square feet of residential condominium units. These approvals allow buyers to build up to 27 residential units in a structure as high as six stories without the necessity of obtaining any variances.

Lamar P. Fisher, President and CEO of Fisher Auction Company is leading the sale and marketing effort for this unique opportunity. “Even we were surprised by the tremendous interest of hoteliers and developers for this property who have heard from word of mouth about the upcoming auction,” Fisher said.

www.fisherauction.com

SOURCE Fisher Auction Company