Saturday, July 14, 2012

Today?s Transactions: Carey Watermark Buys California Resort for $26.5M

Pacific Capital Investors has agreed to sell the Lake Arrowhead property

Carey Watermark Investors Inc. (CWI) has purchased a 97 percent stake in a Lake Arrowhead, Calif. mountain resort from Pacific Capital Investors Inc. for roughly $26.5 million.

The deal includes a $3.7 million renovation of guestrooms and public spaces, which is expected to be completed in early 2013.

The target, Lake Arrowhead Resort & Spa, has 173 rooms and includes 20,000 square feet of indoor and outdoor meeting space, as well as 8,000 square feet that consists of a spa, restaurant, lounge, business center, fitness center, pool, private beach and parking lot.

Roseville, Calif.-based Pacific Capital owned the property through affiliate Fulton Village Green Investors LLC. The firm acquired Lake Arrowhead in 2007 and added the spa as part of a renovation.

Real estate investment trust CWI is based in New York and makes investments primarily in the lodging sector.

"We've got the ability to invest globally, but primarily we're focused on the U.S.," says CWI chief executive officer Michael Medzigian in an interview with Mergers & Acquisitions.

Throughout his career, before joining CWI, Medzigian says he invested significantly in real estate throughout Europe and Asia. But for now, "we like the risk adjusted returns that we see in the U.S.," he adds.

In June, it announced a $22.8 million joint venture investment in New Orleans with HRI Properties. The HRI deal also includes a renovation, estimated at $3.5 million, that is slated to be completed by September 2013. CWI also spent $15.5 million on the Hampton Inn Boston/Braintree, a 103-room hotel.

The acquisition strategy has, so far, paid off. Medzigian says CWI generated 8.2 percent growth in revenue-per available room in 2011, and expects to surpass that shortly. In 2012, "it's just below 8 percent, year to date."


Source: http://www.themiddlemarket.com/news/care_watermark_buys_california_resort_26m-231812-1.html

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