San Diego-based Trigild and Santa Barbara-based Blu Hotel Investors have acquired the 100-room Holiday Inn Express in Santa Cruz, Calif., for $16.5 million, the Santa Cruz Sentinel reports. The hotel was bought from BPR Properties of Palo Alto.
The buyers reportedly above the hotel's assessed value of $10.8 million.
"The sales price tells me that there is strong buyer demand for quality, newer hotels in good locations," Alan Reay, president of Atlas Hospitality Group, which tracks the hotel industry, told the Santa Cruz Sentinel. "In the good locations, most hotels today are selling above assessed values, due to the increased revenues and profitability and lower cost financing."
He called the deal "an excellent purchase for the buyers as they purchased well below replacement cost and the property was in turn-key condition."
Hotel occupancy rates in the city of Santa Cruz reached 61.9 percent for 2013, topping the prerecession high mark, 58.6 percent in 2007, according to STR, which tracks hotel data.
The average daily room rate rose to $131 in Santa Cruz last year, up from $117 in 2007. Revenue per available room grew to $81, up from $68 in 2007.
The hotel, 1.7 miles from the Boardwalk and convenient to Highway 17, offers a free breakfast, an outdoor pool, free Wi-Fi, a 24-hour business center and a workout facility.
Trigild teamed up with Blu Hotel investors a year ago on their first acquisition, the four-story, 121-room Santa Ana Hampton Inn & Suites.