Los Angeles Daily News
12/27/19

Montage Beverly Hills bought for $415 million, or $2.1 million per room
Busy year-end for the folks at Ohana Real Estate Investors.
By Jonathan Lansner

Montage Beverly Hills bought for $415 million, or $2.1 million per room

Let’s just say it’s been a busy year-end for the folks at Ohana Real Estate Investors, as the hotelier from Redwood City has traded California five-star resorts like everyday folks swap Monopoly properties.

In October, Ohana bought the 400-room Monarch Beach Resort in Dana Point for $497 million.

Now we learn Ohana has sold the 201-room Montage Beverly Hills to a British hotel operator at what’s said to be a California record price per room. Maybourne Hotel Group paid $415 million, or $2.1 million per room, said Alan Reay, president of the Atlas Hospitality hotel consultancy.

Ohana isn’t talking, but Reay guesses the close timing of the two deals was to shelter gains from the Beverly Hills property that the firm built in 2008.

Plus, Reay notes Ohana sold for over $2 million per room and bought a coastal asset at $1.2 million per room. Or, roughly speaking, “double the rooms, for almost the same price.”

“I also believe that Ohana sees more upside in the Monarch Beach Resort,” Reay added, noting the opportunity to rebrand the Orange County location with a global nameplate, pushing it even more upscale.

The Beverly Hills buyer Maybourne is an old London hotelier dating to 1893. Maybourne operates three of London’s high-end hotels: Claridge’s, The Connaught and The Berkeley. The Montage Beverly Hills, known for its rooftop lounge above Rodeo and its $10,000-a-night suites, is Maybourne’s first U.S. hotel.

Maybourne said next year it will announce “further plans for the repositioning and renovation of Montage Beverly Hills, to bring the hotel more in line with the three London properties. “

Maybourne boss Paddy McKillen said in a statement, “We are excited to have our first property outside of London, and where better than the city of Beverly Hills. We plan to bring some of the inspiration and creative energy to Montage Beverly Hills that has made our London hotels so successful and much loved, but we never forget that the most important element of all our hotels is our staff and our guests.”

Reay said Maybourne “only owns trophy hotel assets in “A” locations. With high barriers to entry in Beverly Hills, it’s almost impossible to replicate. It’s more a rare chance to get this kind of luxury real estate asset but at this price per room, this buyer must have a real long term hold horizon.”

By the way, California’s previous record hotel purchase was a 2015 deal at $1.7 million per room: the 47-room Malibu Beach Inn for $80 million.