Orange County Hotel Sells Amid Tourism Rebound in Disneyland’s Hometown
Orange County Hotel Sells Amid Tourism Rebound in Disneyland’s Hometown
Utah Investor Acquires Anaheim Property from Special-Services Firm for $57.5 Million
A Utah investor acquired an Anaheim, California, hotel for approximately $57.5 million, as Disneyland’s tourism-focused home region rebounds from effects of the pandemic.
Provo-based Dynamic City Capital purchased the 190-room Portofino Inn & Suites, built in 1978 at 1831 S. Harbor Blvd., for a price amounting to approximately $303,000 per room, according to CoStar data and public filings. The property was acquired from a special-services firm that was assigned the property after a prior owner defaulted on a loan.
The transaction price is among the largest of the past year for Orange County hotels, according to CoStar data, and underscores an overall rebound for the region’s hospitality industry. Hotels, stores and other businesses dependent on visitor spending were hit hard for more than a year after the pandemic’s start in March 2020, as Disneyland Resort and Anaheim’s convention center remained closed or operating at limited capacities.
“We are seeing very strong interest in Orange County hotels and in Anaheim in particular,” said Alan Reay, president of hotel brokerage and research firm Atlas Hospitality Group, which was not directly involved in the disposition of Portofino Inn & Suites. “Pent-up travel demand and the reopening of Disney after COVID have really helped push hotel occupancy.”
CoStar data as of April 14 shows Orange County, among the nation’s hardest-hit hospitality regions in the early months of the pandemic, has seen a steady rise in hotel demand since the summer of 2021 as travelers returned to attractions such as Disneyland, Knott’s Berry Farm and area beaches.
The region’s hotel occupancy for the past 12 months was approximately 61%, a significant improvement from 37% in the prior year, and revenue per available room reached $105.68, up 137% from the prior year. Orange County’s total hotel revenue topped $2.2 billion during that period, an increase of 183%.
The region’s hotel property sales totaled $881 million during the past 12 months, for an average price of $248,000 per room, CoStar data shows. The sales total more than doubled the $330 million of the prior year.
“Hotel investment activity in the Orange County market improved last year, with sales volumes exceeding 2020’s annual total,” said Emmy Hise, director of hospitality analytics for CoStar Group. She noted that economy-class hotels continue to dominate deals in the region, though more upscale properties are now trading more frequently as the hospitality economy rebounds.
As reported in December by CoStar News from public filings, special-services firm C-III Asset Management was under contract to sell the Portofino property to what was then an undisclosed buyer. Public filings by the special-services firm show the hotel was shut down for the majority of 2020 and reopened in May 2021.
The limited-service property saw “very strong” occupancy and room pricing between May and October 2021, spurred by rising capacities at Disneyland as pandemic restrictions were eased, according to public filings.
Dynamic City Capital representatives did not immediately respond to requests from CoStar News to comment on its plans for the hotel. Dynamic City also acquired the 174-room Element hotel in Anaheim last year for approximately $64.7 million, or $372,000 per room, according to CoStar and public data.
