The Irvine Co. has sold the shuttered 541-room Hotel Irvine to Hyatt for $135 million in a deal completing its exit from business hotels.
Irvine Co. closed the hotel in the spring of 2020 amid coronavirus lockdowns and then decided to keep it shut as the big property owner rethought its ownership of two business hotels in Orange County. In February, the Newport Beach-based real estate company sold its Fashion Island Hotel to a group of investors.
Hotel giant Hyatt will own and manage Hotel Irvine under the Hyatt Regency brand after an extensive renovation. No further details about Hyatt’s plans were released.
Hyatt says the Hotel Irvine’s purchase is part of a strategy “to fuel our continued growth in key markets where our guests are traveling and help us care for guests in more ways and more places. … We plan to leverage our world-class commercial engine in one of the best markets in Southern California to unlock additional value in the hotel.”
Hotel analyst Alan Reay called the property a “strong location close to John Wayne Airport and high commercial demand from the nearby office market.”
In February, Montage International and Eagle Four Partners bought Irvine Co’s Newport Beach hotel to be reopened next year as the Pendry Newport Beach. The retooled property will have 295 rooms, including 82 suites.
“As local owners, we are thrilled to be the new stewards of the former Fashion Island Hotel at the heart of Newport Beach. We are dedicated to continuously investing in Newport Beach and elevating the hospitality experience of our neighbors and guests,” said Kevin Martin of Eagle Four Partners.
The two sales leave Irvine Co. to own and operate just one hotel property, the high-end Resort at Pelican Hill in Newport Beach.
Irvine Co. decided that operating business-oriented hotels — a highly competitive, often price-driven business — was better left to others. The company retained ownership of the land under the Newport Beach hotel as a land lease.
It’s been a recovery year for the Orange County hotel business. Countywide, rooms were 69% full in 2022’s first six months vs. pandemic-chilled 48% in 2021’s first half, according to Visit California. An average room cost $193 this year — up 43% from $135 a year earlier.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at email@example.com