The change in ownership comes just five years after the 16-story property opened in downtown San Diego

By LORI WEISBERG | The San Diego Union-Tribune

PUBLISHED: July 9, 2024 at 10:09 a.m. | UPDATED: July 9, 2024 at 11:05 a.m.

Nearly five years after the gleaming 16-story Carte hotel opened in Little Italy, it has been sold to a global investment firm, which paid more than $61 million for the Ash Street property.

Certares, a firm that focuses exclusively on the travel and hospitality industry, announced earlier this month that it had acquired the 246-room hotel, which is part of Hilton’s upscale Curio collection. While Certares declined to divulge the purchase price, the San Diego County Assessor’s office confirmed Monday that the property on Ash near State Street sold for $61.5 million.

The hotel, which includes a rooftop bar and lounge, outdoor pool deck with a saltwater pool, a lobby restaurant, and a 25,000-square-foot athletic club, was built at a cost of $89 million.

“We are excited to add one of the top lodging assets in the downtown San Diego market to our growing portfolio,” Nolan Hecht, senior managing director at Certares, said in a statement. “This transaction is consistent with our strategy to acquire high quality experiential real estate in growing major markets.”

Certares already owns the 245-room Courtyard San Diego downtown.

Hecht said his company continues to find San Diego a very appealing and financially lucrative hotel market. As part of the acquisition, the existing debt was also paid off, he said. Partnering on the deal with Certares was HHM Hotels, a management and investment firm that operates hotels across the U.S. and Canada.

“We are bullish on San Diego,” Hecht said in an email to the Union-Tribune. “There’s a strong, diverse demand base — leisure, convention, business, life science, health care, university, military, etc. — and very limited new supply.”

In its announcement of the sale, which closed last week, Certares noted that the previous owner, Carte Hotel Partners, decided to “reinvest” in the new ownership. It’s unclear, though, what exactly that means and whether it will have any kind of ownership stake.

“I think they want to play for the future upside,” Hecht said, “and the hotel only opened in 2019. There will be a lot of future growth, and the Little Italy area of San Diego is a pocket of growth.”

The acquisition comes at a time when hotel sales statewide are down more than 40 percent for the first six months of the year compared with the same period in 2023, according to the Atlas Hospitality Group. Even so, San Diego’s hotel market continues to perform quite well, said Atlas President Alan Reay.

“I think this was a very good deal for the new buyers,” Reay said. “At $61 million, it is substantially below replacement cost and it would cost at least double that to replace it today.”