John Wayne was arguably Newport Beach’s most famous resident. That remains true today as it was when he moved to the coastal southern California city back in the 1960s. Rumor has it he was so enmeshed in the fabric of the community that he oftentimes picked up checks at local restaurants and watering holes and scooped up hitchhikers in his capacious station wagon. He also was also famous for holding court on his boat, Wild Goose, still docked in the Newport Harbor, sharing films and recounting stories of Hollywood yore.
His star shines so much that, today, if you want to visit Newport Beach, flying into John Wayne Airport is the best option and, when in town, you can even stay at the Hyatt Regency John Wayne.
The Duke remains the doyen of Newport Beach.
One of the clubs that he often frequented was the Balboa Bay Club, situated right on the harbor and part of the Balboa Bay Resort. Today, it’s owned by local real estate firm, Eagle Four Partners, which, like Wayne, is as embedded in the city, a steward of local hospitality real estate.
Kory Kramer, a partner with Eagle Four Partners, who serves as its investment officer, knows the area well: he’s an Orange
County native. And while Kramer wasn’t around to hear Wayne’s tales, the legend still lives on. The Balboa Bay Club is celebrating its 75th anniversary this year—if its walls could only talk.
“It’s pretty awesome,” Kramer enthusiastically told HOTELS recently. “All the old Hollywood and, of course, John Wayne. So cool. There’s a lot going on.”
Like fans of John Wayne westerns, when it comes to Newport Beach real estate, Eagle Four Partners, which was founded in 1996 and has participated as the lead equity investor in more than $3 billion of real estate transactions, are huge admirers. And when it comes to locales, Newport Beach is as good as it gets, and they aren’t building more of it.
“We’ve taken advantage of the last couple of years in terms of opportunities and investing in our hometown,” Kramer said. “That’s the story.”
Of its 13-asset portfolio, Eagle Four Partners has equity stakes in four prominent Newport Beach properties. One of which is the erstwhile Fashion Island Hotel, which Eagle Four acquired in early 2022 from another local investment group, Irvine Company, and partnered with Montage International to convert the hotel into the Pendry Newport Beach, opening later this fall after an $80-million renovation.
The partnership made eminent sense. Montage is based in Orange County and its flagship property, Montage Laguna Beach, is only a 25-minute drive south down CA-1 from Newport Beach.
“It’s a natural fit; they wanted to expand their Pendry brand,” Kramer said. In fact, it will be the third Pendry hotel in SoCal, joining Pendry San Diego and Pendry West Hollywood. If the Montage brand is old school, classic luxury, Pendry is its precocious, playful sibling, still high on luxury but with a lifestyle twist. Kramer called the brand the perfect fit for the project.
The hotel, like Balboa, will have its own private club, much like a Soho House, Kramer said, like something one would find and want to join in New York or London. To that, Kramer refers to the property as an “urban resort,” which at its heart has the local denizens in mind. “That’s key,” he said. “People who come to Newport Beach want to interact with locals—it’s totally different than what drives other hotels and other markets.”
When complete, the hotel will have 295 guestrooms, including 82 suites, Spa Pendry, a pool with sundeck and 14,000 square feet of meeting and event space, including an 8,710-square-foot ballroom. The hotel’s interior design is tasked to Studio Munge with architecture by WATG and landscape architecture by Burton Studio.
The hotel, a Four Seasons when it first opened in 1996, has an arresting facade, reminiscent of Tetris blocks along the sides with rooms cascading like a waterfall toward the earth. One part of the redesign was to make the hotel more operationally efficient and revenue generating. Consider the back of the house behind the front desk. When it was a Four Seasons, it was basically all offices. “We blew all that out,” Kramer said, making way for the private social club.
Though the purchase price details were not disclosed, Eagle Four’s acquisition of the asset is compelling in that it quite possibly was not the highest bidder. It goes to the idea of local ownership trading on local reputation and tradition. Like Eagle Four, Irvine Company is a local developer, which, as Kramer told it, “realized we’d be a better steward of the asset.”
Which isn’t to say it came cheap. “I mean, we are paying for the location,” Kramer said. Barriers to entry in Newport Beach are high—there are no new hotels currently being zoned for or in the construction pipeline. The only real opportunity is to acquire and reposition existing stock. “That’s kind of our business plan,” Kramer said. “And we’re okay with getting deals that have hair on them. Being local really helps.”
SEEING BEYOND
It sure does. One of Eagle Four’s most interesting deals was the 2020 joint acquisition with Lyon Living of the Newport Beach Marriott Hotel & Spa. Following an extensive renovation, the hotel reemerged in 2022 as the VEA Newport Beach, a Marriott Resort & Spa.
VEA? It’s not an official brand under Marriott, but one that Eagle Four created with the blessing of the Bethesda, Md.-based hotel giant, which operates the property. Like an old John Wayne story, it’s a good yarn.
Eagle Four bought the property during the throes of the pandemic in an off-market deal from Host Hotels & Resorts, which, not unlike the Pendry deal, knew the hotel would be in good hands, hands that needed to give it a makeover. Eagle Four went to work immediately on transforming it into “something that’s great for the local community, but also something that lives up to its potential of its location,” Kramer said.
One of the first decisions was to reduce the key count from 532 to 400 and, then, figure out what brand to flag it with. It toyed with a couple of brands, such as JW Marriott or affiliating it under Marriott’s Autograph Collection, but because of the size of the hotel and it catering equally to group and transient business, nothing, Kramer said, really fit.
There are many Marriott hotels across the globe, but Newport Beach and Orange County hold a special place for current Marriott CEO Tony Capuano, who worked in the area early on in his Marriott career. “It’s near and dear to his heart,” Kramer said. Eagle Four wanted to create something special for the hotel and worked directly with Capuano to create its own brand.
VEA, in fact, is a made up word, a derivative of the Spanish word to see, ver. Seascape and harbor views result in Instagrammable sunrises and sunsets, Kramer said.
In conjunction with the project, Eagle Four is also in the process of adding 111 Ritz-Carlton-branded residences adjacent to the hotel that Eagle Four and Lyon Living got the entitlements for last year. The residences are slated to be complete by 2026.
Both the Pendry and VEA deals were made during rocky times for capital markets, as the cost of capital rose from the result of higher interest rates. For the Pendry, Eagle reportedly secured a $146-million loan provided by ACORE Capital that went toward acquisition and renovation.
With VEA, Eagle’s interest rate was locked in until it has to refinance later this year. “Hopefully the capital markets by then have settled down,” Kramer said.