Hotel Sells for Hefty Price in El Dorado Hills
Hotel Sells for Hefty Price in El Dorado Hills
Sacramento Business Journal
01/05/16
Hotel Sells for Hefty Price in El Dorado Hills
By Mark Anderson
In another sign that Sacramento’s hospitality market is becoming more attractive to investors, a hotel in El Dorado Hills recently sold for a robust price.
A San Francisco investor purchased the Holiday Inn Express in the El Dorado Hills Town Center on Dec. 15 for $14.4 million, or $155,203 per room, and plans a major renovation.
The selling price for the 93-room hotel is on the higher end for a suburban limited-service hotel. For comparison, the 132-room Holiday Inn Express Sacramento Convention Center sold for $9.5 million, or roughly $71,000 per room, last August.
The price reflects the hotel’s strong performance since it opened in late 2005, said Justin Myers, a vice president for Irvine-based hotel brokerage firm Atlas Hospitality Group. The hotel, which was originally built for roughly $12 million, had been run by McDermid Management Co. of Colorado.
“El Dorado Hills is an affluent market, and because of its proximity to Intel and Folsom, it is a strong hotel market,” said Myers, who represented the seller.
The buyer, Rajputana Hospitality, will spend $1 million on renovations and will also keep the entire staff of the hotel, Myers said.
“It is a very well constructed hotel in a unique center — it backs up to a man-made lake,” Myers said. “It is a Santana Row kind of spot but on a smaller scale.”
Santana Row is an upscale mixed-use shopping center in San Jose. The El Dorado Hills Town Center holds events, concerts and even parades, while also including retail, office, service, and restaurant uses in addition to the hotel.
Sacramento’s hotel market has surged in recent months, with some properties selling for record-setting prices and investors planning roughly 20 new lodgings from downtown to the foothills. Rising room and occupancy rates are the primary cause, and analysts believe the market will stay healthy for years.
