Built in 1988, the hotel was fully renovated in 2006 and completed a $3.5 million guest suites renovation in May 2012. The hotel features a 12-story atrium and panoramic views of San Diego Bay and the city. Standard suite amenities include two separate rooms, 37- or 42-inch flat screen high-definition televisions, microwave, mini refrigerator, coffee maker, dining table and chairs, sofa bed and high-speed wireless internet access. The hotel features approximately 5,000 square feet of meeting space, including the 2,032 square foot Monterrey Ballroom, an indoor heated swimming pool and whirlpool and 3,411 square feet of leased retail space located on the ground floor. The hotel also offers PFC Bar & Grill, open daily from 11:00am until midnight, serving fresh seafood and offering a wide selection of spirits, wine and beer, including many of San Diego’s famous locally produced microbrews.
In 2012, the Embassy Suites San Diego Bay – Downtown operated at 83 percent occupancy, with an average daily rate (“ADR”) of $198, room revenue per available room (“RevPAR”) of $165, earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $8.8 million and net operating income after capital reserves (“NOI) of $7.8 million. For all of 2013, the Company currently forecasts that the hotel will generate EBITDA of $8.5 to $9.0 million and NOI of $7.5 to $8.0 million, both of which are before an expected $1.0 million renovation impact.
In connection with the acquisition, the Company is assuming a $66.8 million secured, non-recourse loan, which is subject to a fixed interest rate of 6.275%. The loan matures in June 2016.
In conjunction with the Company’s acquisition of the Embassy Suites San Diego Bay – Downtown, the Company has selected HEI as manager for the hotel.“HEI has a strong presence in the San Diego market and has a great understanding of, and excellent experience with operating all-suite upper upscale properties,” continued Mr. Bortz. “We’re delighted to be developing a strategic relationship with HEI and look forward to working with them at the Embassy Suites San Diego Bay – Downtown. With the addition of HEI, we now have 10 third party managers operating our hotels throughout our portfolio. This improves our already diverse group of hotel management companies, while also enhancing our opportunities to expand our best practices and asset management initiatives.”