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Sale of Courtyard Part of $1B in Deals in Hot Region, ‘Greatest Hotel Market’ in West

BusinessSale of Courtyard Part of $1B in Deals in Hot Region, ‘Greatest Hotel Market’ in West

Commercial real estateCourtyard San Diego Downtown at 530 S. Broadway. Photo credit: Courtesy, CBRE

The 245-room Courtyard San Diego Downtown Hotel by Marriott has been sold to an affiliate of New York City-based Certares Management LLC, a real estate firm announced.

Certares partnered with Philadelphia-based HHM on the purchase, according to CBRE, which arranged the sale. Michael DiPrima and Diana Simpson with CBRE Hotels handled negotiations for the seller. The firm did not disclose the terms.

The sale marks the duo’s eighth hotel transaction in the San Diego metro since June 2021, topping other investment sales team in the region. In that time, DiPrima and Simpson have facilitated approximately $500 million in hotel transactions in San Diego.

“Right now, San Diego is the greatest hotel market on the West Coast and possibly the country,” said DiPrima. “The metro is seeing more transaction activity than any other region in Southern California, and a lot of that has to do with its booming tourism and leisure activity, as well as the tremendous amount of life sciences and technology development underway.”

Located at 530 S. Broadway in downtown San Diego, the historic hotel was originally home to the San Diego Trust & Savings Bank in 1928.

It was converted into a hotel in 1999 and features a lobby with 32-foot-high ceilings and 4,800 square feet of meeting space, including the Safe Deposit room with the original 47,000-pound Mosler Safe Company vault door. The guest rooms recently underwent a $4.5 million renovation.

Simpson cited downtown growth – 4.5 million square feet of office space under construction, along with 8,000 residential units – as evidence of the area’s transformation to “a true live-work-play environment.”

“All these factors are sparking interest among institutional hotel investors, as was the case with Courtyard San Diego Downtown,” she said.

According to Real Capital Analytics, DiPrima and Simpson have negotiated 44% of all San Diego hotel sales in the past year.

The team’s transactions since June 2021 include:

  • Hilton San Diego Mission Valley in June 2021
  • Hotel La Jolla in September 2021 and Estancia La Jolla Hotel & Spa in December 2021
  • Courtyard by Marriott Old Town and Fairfield Inn & Suites Old Town, also in late 2021, and
  • Courtyard by Marriott San Diego Gaslamp and Moxy San Diego Downtown/Gaslamp Quarter in May 2022.

The San Diego hotel market had a strong second quarter of 2022 with revenue per available room exceeding the same quarter in 2019 – the last available data before the pandemic’s impacts – by 16%, according to Kalibri Labs.

Occupancy rose to 97% of second quarter 2019 levels, and the average daily rate exceeded 2019’s levels by 20%.

According to CBRE Hotels Research in May report, the San Diego region’s room revenue is expected to increase 25.6% over 2021 to $122.29 this year. A full recovery to pre-pandemic levels is expected in 2023.

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