Sales Frenzy Continues

Orange County Business Journal, Jun 27-Jul 3, 2005 by Cain, Sandi

While hotel construction remains all but dead, the brisk pace of hotel sales continues in Orange County.

Recent hotel deals include San Clemente-based Sunstone hotel Investors Inc.'s buy of the Sutton Place hotel in Newport Beach from Tarsadia hotels, also of Newport Beach.

Another deal: the 230-suite Hilton Suites Anaheim. The business hotel was sold by Beverly Hills-based Hilton hotels Corp. to RLJ Urban Lodging Fund LP, an affiliate of RLJ Development LLC in Bethesda, Md., as part of a three-hotel sale for $72 million.

The Hilton Suites represented an estimated $23 million of that sale, which also included hotels in Beachwood, Ohio, and Phoenix.

It was the third OC hotel bought by RLJ Urban Lodging this year. Other acquisitions for a total of $122 million include the Residence Inn Anaheim Resort in Garden Grove, the Residence Inn San Diego in Mission Valley and the Washington Terrace hotel in Washington, D.C.

RLJ Urban Lodging is a private equity fund created by RLJ Development to acquire and develop hotels in urban markets under the Hilton and Marriott names.

"With the (equity from the) new fund, RLJ thinks California still has growth potential for hotels," said Bernie Murphy, Western region vice president for the Encinitas office of The Plasencia Group Inc., a hospitality consulting company that represented Hilton hotels Corp. in the transaction.

RLJ Development's Chairman and Chief Executive Robert L. Johnson is the founder and chief executive of BET cable network and owner of the NBA's Charlotte Bobcats and the WNBA's Charlotte Sting.

-Sandi Cain