(This story has been updated and corrected to include the most expensive hotel deals of 2021 in California.)
Global investor Blackstone has sold the historic La Quinta Resort & Club near Palm Springs to a British private equity firm for $255 million, the highest total price paid for a hotel in Southern California in more than two years.
The sprawling 45-acre, 785-room resort 49499 Eisenhower Drive in La Quinta, in the Coachella Valley of Southern California, became a desert retreat for Hollywood celebrities and a popular location for filming movies and TV shows after its debut in 1926. It was acquired by a subsidiary of British private equity firm Henderson Park for the highest price for a hotel in the desert resort towns east of Los Angeles, according to CoStar data.
The sale, which closed in December, came at the end of a record year for U.S. hotel deals as private equity funds raised billions of dollars ahead of a tidal wave of hotel foreclosures that did not materialize, said Alan Reay, president of Irvine, California-based hotel brokerage Atlas Hospitality Group.
The volume of nearly $41 billion in hotel sales nationwide in 2021 slightly exceeded the $40.5 billion spent in 2018, according to CoStar’s latest report on hotel capital markets in the United States. United.
“We’re coming out of the worst downturn in history, and yet buyers are paying high prices as if COVID never happened and everything going forward will be bright and rosy,” Reay said. “These companies and funds have tons of reserves that they still need to put into hotels.”
Competition for bids has expanded in the first weeks of 2022, Reay said, and he expects buyers to outnumber sellers at least in the first six months of the year, which should keep upward pressure on prices.
Blackstone acquired the La Quinta Resort as part of its 2018 $1.69 billion purchase of a portfolio of properties from GIC, Singapore’s sovereign wealth fund. The deal, which also included the Grand Wailea Resort Hotel & Spa on the island of Maui and the Arizona Biltmore in Phoenix, valued La Quinta at $149 million at the time.
Henderson Park, which specializes in hotels and also has offices, warehouses and other commercial properties across Europe, the UK and Ireland, last year purchased 12 Hilton-branded hotels with a total of 2,424 rooms across the UK and Ireland. La Quinta is the first commercial property she acquired in the United States.
The sale is the highest total price paid for a Southern California hotel since December 2019, when Maybourne Hotel Group, also based in London, bought the upscale boutique hotel Montage in Beverly Hills for 397.6 million, or just under $2 million per room, according to CoStar Data.
This is the third highest hotel sale of 2021 by total price. In late December, Boardwalk Investments Group purchased the Villagio Hotel at The Estate Yountville in Yountville, Calif., from Brookfield Asset Management for $266.4 million, or $2.4 million per key. In April, Sunstone Hotel Investors purchased Montage Healdsburg from Redwood City, Calif.-based Ohana Real Estate for $265 million, or just over $2 million per key.
With this acquisition, Henderson Park’s portfolio now totals 9,300 rooms, including hotels in France, Greece and Spain. The company recently acquired commercial and hotel management platform of Amaris Hospitality and launched a new hotel asset management business called Klarent Hospitality.
The buyer and seller did not return requests for comment from CoStar News, nor did management company Pyramid Hotel Group.