By Alex Barreira – Staff Reporter, San Francisco Business Times

Feb 11, 2025

Global developer and investor Brookfield Properties has acquired the 253-room Hyatt Regency Sonoma Wine Country hotel in Santa Rosa for $55 million.

The seller, the United Overseas Bank Ltd., New York Agency, completed the deal Nov. 22 according to property records. It was the North Bay’s most expensive hotel transaction of 2024, according to county-level data from Irvine-based Atlas Hospitality.

The Hyatt Regency Sonoma Wine Country changed hands for roughly $217,391 per key. That number, calculated from the price of the real property in public records, may be slightly lower than the actual sale price when factoring in goodwill costs and other intangibles priced into the deal.

The hotel was built in 2002 and last renovated in 2018. After the 2017 Tubbs Fire destroyed area hotels including the Hilton Sonoma Wine Country and Fountaingrove Inn, the Hyatt Regency quickly added 89 rooms.

The buyer was a Delaware LLC, Brookfield US 2 Real Estate Sub LLC, whose mailing address is listed in public records as in care of Brookfield Properties at its New York headquarters.

Brookfield affiliates last made a splash in the Bay Area hotel scene with its acquisition of Chicago REIT Watermark Lodging Trust in 2022, which gave it control of more than 1,000 rooms region-wide including the Ritz-Carlton San Francisco, the San Jose Marriott, and the five-star Fairmont Sonoma Mission Inn & Spa luxury resort. In that case, the purchase was made on behalf of private funds managed by Brookfield Asset Management.

While hotel deal volume in Sonoma County increased to a dozen transactions in 2024, per a recent report from Atlas Hospitality, the total dollar volume of those deals fell by 45% compared with the 11 deals in 2023. The median hotel price fell by 28%.

Despite some notable price declines in individual deals, hotel sales have not yet dipped into the severe discounts seen in the office market, Reay writes in Atlas Hospitality’s year-end California deal survey. Lenders have been more accommodating with borrowers, reducing the urgency to immediately sell.

“Looking ahead to 2025, hotel owners are unlikely to see significant relief,” writes Atlas Hospitality President Alan X. Reay in the report. “With interest rates remaining high, lenders exercising caution in their lending practices, and inflation outpacing revenue growth, the challenges for hotel owners are expected to persist.