Driftwood’s $85.7M Buy; More Hotel Transactions

NATIONAL REPORT—Driftwood Acquisitions and Development has acquired a hotel in San Diego—with plans to build another; Apple Hospitality REIT Inc. is investing in the Orlando market; and HREC Investment Advisors has arranged the sale of a property in Northern California.

San Diego Marriott Mission Valley 

Driftwood Acquisitions and Development (DAD) has entered the California market with the $85.7-million acquisition of the 353-key Marriott Mission Valley in San Diego. The firm also intends to develop a second hotel on the southwest corner of the same site.

“San Diego’s diversity of demand generators has made the area a leading year-round destination for business and leisure travelers,” said Carlos J. Rodriguez, chairman and chief executive officer of DAD. “In 2018, San Diego hosted almost 36 million visitors who spent $11.5 billion during their stay. The Marriott Mission Valley has demonstrated strong year-over-year growth since its common-areas renovation in 2017. All of this points to the property’s potential to yield exceptional returns for our investors.”

DAD will pursue continual operational growth initiatives at the Marriott Mission Valley, including carrying out a multimillion-dollar capital improvement program, encompassing full guestroom renovations and further upgrades to the outdoor pool area. Built in 1988, Marriott Mission Valley has over 37,000 sq. ft. of meeting and event space, with hotel amenities including Dine Entertain Network (DEN) Restaurant, M Club Lounge, a business center, fitness center, outdoor swimming pool and convenience store.

Recognizing San Diego’s further potential as a lodging market, DAD will parcel a 1.75-acre piece of land located on the current 7.4-acre Marriott Mission Valley hotel site. The proposed 130,000-sq.-ft., 150-key hotel will include 5,000 sq. ft. of meeting space and a state-of-the-art fitness center. Construction is estimated to begin in 2021.

Home2 Suites by Hilton Orlando Airport

Apple Hospitality REIT Inc. has revealed the opening and acquisition of the new 128-room Home2 Suites by Hilton Orlando Airport for a purchase price of $20.7 million, or approximately $162,000 per key.

“This beautiful, newly constructed Home2 Suites adds a presence for us near Florida’s busiest airport and is a great addition to our portfolio,” said Nelson Knight, EVP and chief investment officer of Apple Hospitality. “Not only will the hotel benefit from travelers visiting the many leisure attractions that Orlando and the surrounding areas are known for, the market is also home to a variety of business and educational demand generators. We secured attractive per-key pricing prior to the start of construction of the hotel, which we believe adds meaningful value at a time when construction costs are rising.”

Following this acquisition, the Apple Hospitality portfolio includes 243 hotels with more than 31,000 guestrooms geographically diversified throughout 34 states.

Sea Ranch Lodge

HREC Investment Advisors has arranged the sale of the full-service, oceanfront 19-room Sea Ranch Lodge situated on 52 acres. The resort property is located in The Sea Ranch community, a master-planned oceanfront development in Sonoma County in northern California.

HREC Investment Advisors exclusively represented Fillmore Capital Partners LLC during the transaction. The sale was negotiated by Mike Armstrong, principal in the San Diego office, and Bill Murney, managing director in the Phoenix office.