What Beverly Hills Investment Firm Might Do After Buying Sacramento’s Citizen Hotel
What Beverly Hills Investment Firm Might Do After Buying Sacramento’s Citizen Hotel
Sacramento Business Journal
08/11/15
What Beverly Hills Investment Firm Might Do After Buying Sacramento’s Citizen Hotel
By Mark Anderson
A Beverly Hills-based investment firm is buying the boutique Citizen Hotel in downtown Sacramento. The move could signal upgrades are coming for the landmark property.
The hotel is being sold by Cal West Partners, a limited partnership managed by Rubicon Partners Inc. of Sacramento. The buyer is Sacramento Hotel LLC, a limited liability corporation that will be managed by investment firm Platinum Equity. Neither would discuss terms of the deal, first reported by Hudson Sangree in the Sacramento Bee. The sale has not yet closed.
The Citizen, which carries the Joie de Vivre hotel brand, is four blocks from the site the new downtown arena, expected to open in the fall of 2016.
Valet parking for the property is in a city parking garage at 10th and I streets, and the transfer of the rights to 183 parking spaces is what signaled that there is a sale afoot. The contract to transfer the rights to the parking spaces is on the Sacramento City Council’s consent calendar for Tuesday.
Platinum Equity has over $6 billion of assets under management. It specialized in mergers, acquisitions and operations of revenue-producing properties. Platinum’s portfolio companies generated more than $17 billion in revenue in 2014, according to the company web site.
Platinum currently has 12 hotels in its portfolio of properties with more than 3,000 rooms between them. On its web site, Platinum says it brings sophisticated revenue management strategies to its hotel properties. It also can do extensive renovations to physically transform hotels and it selectively “upbrands” properties to higher-revenue hotel brands.
Much depends on the management contract, industry experts say. And it’s not clear whether this sale opens up that contract for renegotiation. But if the new owners plan to upgrade the brand, there are some options, said Alan Reay, president of Atlas Hospitality Group, a hotel brokerage in Irvine.
The Westin brand, Kimpton brand and even Marriott Hotels and Resorts operate unique boutique properties under their reservation systems.
When the Citizen opened, San Francisco-based Joie de Vivre was California boutique hotel chain. Joie de Vivre merged with Thompson Hotels in 2011, which have both become brands under the new parent company, Commune Hotels & Resorts. The Thompson brand Commune is a luxury brand and the Joie de Vivre are boutique properties with character in the Commune brand.=
Boasting 198 rooms and the trendy Grange restaurant, the Citizen debuted as a boutique hotel in 2008, after a long transformation from a old office building.
The Citizen opened to great fanfare, despite being the middle of national recession. The hotel’s restaurant, Grange, immediately became part of Sacramento’s fine dining scene and a stalwart in the farm-to-fork movement.
Completed in 1925 for the California Western-States Life Insurance Co., the 14-story building was at its opening the tallest building in Sacramento — and the first to be higher than 10 stories.
The building suffered from deferred maintenance in the 1960s and 1970s. A renovation in the 1970s and 1980s brought in drop ceilings and drywall offices to create a modern appearance.
The latest renovation, which turned the office building into the Citizen Hotel, took three years. It included significant structural improvements and stripping out the drop ceilings and drywall to expose the original white marble in the public areas of every floor around the elevators.
