LaSalle Hotel Properties, owner of 35 upscale hotels, is the new owner of the 162-room Viceroy. Final price amounts to about $494,000 per room, which is on the upper range for upscale properties that have sold over the last couple of years. The seller, Viceroy Hotel Group, will continue to manage the property. From the WSJ:
"It's just a pretty spectacular location, and it's a great market," LaSalle President and Chief Executive Officer Michael Barnello said of the hotel, located a block from the beach on Ocean Avenue. He said Santa Monica's tight restrictions on new construction make it an ideal market for owning established properties. The Viceroy's price reflects the hotel acquisition market's focus this year on high-end properties, a trend that has inflated the average sale price. U.S. hotel sales averaged $153,463 per room at their peak in 2006 and tumbled to $97,610 per room at their nadir in 2009, according to Real Capital. However, this year, they are averaging $158,570 per room, mainly because only the highest-quality, trophy hotels in big markets are trading as buyers favor stability.
The Journal story notes that real estate investment trusts like LaSalle have been going after high-end hotels as of late.