Hyatt Regency at Aventine sells for $216M, making it San Diego's second largest hotel sale in 5 years
Aug 12, 2022
The Hyatt Regency La Jolla Aventine, which quickly became an iconic San Diego building not long after it opened more than three decades ago, has been purchased for more than $216 million by prominent biotech builder IQHQ. It represents the second priciest hotel purchase in the last five years, trailing the $226.7 million sale late last year of the 350-room Embassy Suites La Jolla, said Alan Reay, whose Atlas Hospitality Group tracks hotel sales up and down California. This story is for subscribers
We offer subscribers exclusive access to our best journalism. Thank you for your support. The 416-room Hyatt Regency purchase, which closed earlier this month and was first reported by CoStar News, rounds out other key acquisitions IQHQ has been making of surrounding buildings occupying a 12-acre site off La Jolla Village Road. The company already is in the midst of building out a $1.6 billion bayside life science complex in downtown San Diego called the San Diego Research and Development District. It acquired the century-long leasehold from the Manchester Financial Group. In addition to the Hyatt, IQHQ also purchased this month what’s known as the Aventine Atrium building next to the hotel for about $11 million, according to the San Diego County Recorder’s office. And last year, the San Diego-based company bought the adjacent 11-story Aventine Office Building for roughly $170 million, said County Chief Deputy Assessor Jeff Olson. Advertisement
It’s unknown what IQHQ plans for that property, which is home to several tenants, including CoStar Group, WeWork and brokerage JLL. At the time of that purchase, IQHQ also paid $35 million for a separate retail property that includes restaurant tenants, Olson said. Also a mystery is what’s in store for the 16-story hotel, which last year completed a $10 million renovation that included a new exterior color scheme of “coastal gray” and white , a refurbished lobby and new furnishings in all the guestrooms. IQHQ President Tracy Murphy did not respond to calls and emails seeking comment. While many of San Diego’s larger, full-service hotels took a financial beating during the first year of the pandemic, Reay believes that a high-quality property like the Hyatt Regency has recovered well and is enjoying much higher occupancies. “No one is going to buy a Hyatt of this caliber just to tear it down,” said Reay. “Because of the La Jolla area location and everything going on in the life sciences and medical arenas, you have very few markets in the U.S. that offer so many demand generators. A lot of the business hotels do well Monday through Thursday but properties like the Hyatt also pick up people who want to go to La Jolla and all the other places that San Diego has to offer.”
Built in 1989, the hotel was designed by the celebrated post-modern architect Michael Graves, whose most famous buildings include the city administrative building in Portland, Oregon, and The Humana Building, a 26-story skyscraper in Louisville, Kentucky. He also designed the Swan and Dolphin Resort at Walt Disney World. Based on the Hyatt hotel’s sales price per room of more than $500,000, Reay pointed out that it is a much pricier transaction than the just-announced sale of the Hotel Irvine, known at one time as the Hyatt Regency Irvine, to Hyatt Hotels for nearly $250,000 a room. “At more than $500,000 a room, that’s still below replacement cost,” Reay said. “You couldn’t build that hotel for under $750,000 a room.”
Singapore-based GAW Capital Partners, which sold the hotel to IQHQ, purchased the property in 2019 for $122.4 million, said Olson. Four years earlier, the hotel had changed hands in a deal valued at $118 million, which also included an adjacent fitness club, he said.