Hyatt Regency La Jolla
San Diego, CA
Off-market acquisition of a 417-key hotel from Strategic Hotels, a luxury hotel REIT divesting non-core assets prior its go-private transaction
Gross IRR
19.6%
Equity Multiple
1.51x
Hold Period
2015-2019
Total Equity
$48M
Equity Profit
$43M
Acquisition Price
$118M
Exit Price
$147M
Hotel Keys
417
Square Footage
239K
Key Investment Thesis
- Off-market acquisition of an institutional quality asset in an attractive market that had been undermanaged
- Located in the La Jolla/University City submarket, which is home to UC San Diego and booming biotech and pharma industries, with proximity to San Diego beaches
- Representing less than 2% of Strategic Hotel’s total EBITDA, the hotel had not received focused asset management
- Underwent a $12M renovation immediately prior to JMA’s acquisition, eliminating significant near-term capex needs
JMA Value Creation
Personal relationship with Strategic Hotels generated an off-market deal at a point in the lodging cycle when such trades, especially in gateway markets like San Diego, were rare
Sourced LP equity from Walton Capital, leveraging an existing capital relationship
Engaged hospitality consultants to conduct a thorough review of the labor productivity and hotel cost structure to generate significant savings
Eliminated 50% of Hotel’s CAM budget through diligent review
Worked with Hyatt to introduce resort fee to generate significant high-flowthrough income
