SAN DIEGO Pebblebrook Hotel Trust has acquired the 450-key Westin Gaslamp Quarter hotel from Starwood Hotels & Resorts Worldwide Inc. for US$110 million, or US$244,000 per key, in an all-cash transaction.
The hotel, located in the heart of San Diego’s famed Gaslamp Quarter, will continue to be managed by Starwood Hotels and Resorts Worldwide. In 2010, The Westin Gaslamp operated at 72% occupancy, with an ADR of US$157.
“We are very excited about the acquisition of The Westin Gaslamp,” says Pebblebrook President and CEO Jon Bortz. “The hotel is ideally located in the Gaslamp Quarter of San Diego and is expected to greatly benefit from the continued economic recovery in the market… The strong leisure, convention and group demand of San Diego, particularly in the Gaslamp Quarter, makes The Westin Gaslamp an exceptional investment for our company.”
The 24-year-old hotel offers views of San Diego Bay and downtown San Diego, is adjacent to Westfield Horton Plaza and enjoys some of the largest guestrooms in the hotel’s competitive set. The property also features three food and beverage outlets—the casual-American Horton’s Bar & Grill, Café Express and The Lobby Lounge. The hotel boasts more than 32,000 sq. ft. of indoor and outdoor meeting space spread across 22 rooms.
The Westin Gaslamp is currently undergoing a multi-phase, comprehensive renovation of all guestrooms and public areas. The recently completed guestrooms renovation accounted for a total investment of US$12 million. Pebblebrook will fund US$10 million for this phase of the renovation through a reimbursement to Starwood.
The hotel’s comprehensive public area improvements are expected to commence in the summer and are projected to be completed in late 2011 or early 2012, through an additional total investment by Pebblebrook estimated at US$13 million. The renovation will include upgrades to the hotel’s public restrooms, lighting and the exterior arrival experience. The renovation also includes the lobby and restaurant and bar, with a new concept for the restaurant. A full overhaul of the hotel’s meeting space is also planned, with an increase to the amount of total meeting space and significant enhancements to the indoor/outdoor San Diego Ballroom and Terrace.
“The large-scale, comprehensive renovation and improvement plan to the 450 guestrooms and all facets of the public areas will touch every aspect of the guest experience at the hotel,” Bortz says. “We believe this investment will substantially improve the performance of the hotel, beyond general market gains, over the next several years.”
The Westin Gaslamp marks the 10th acquisition for Pebblebrook since its initial public offering in December 2009.