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Hotels Look Like the Next New Thing for Developers

Hotels Look Like the Next New Thing for Developers REAL ESTATE By Shelly Garcia Bob Selleck probably doesn’t consider himself a trendy guy, but the real estate developer seems to have landed right on the cusp of the next new thing in the industry. Selleck Properties is about to begin work on a 10-acre parcel in Newbury Park that will house two new hotels along with a restaurant and a retail complex, a project that reflects a rekindling of interest in hotel development and, just as important, a general sense that the number of hotel rooms in the area has lagged well behind the need for such properties. “Most hotel owners believe that we are on the cusp of the next wave of expansion,” reads the opening line in the Marcus & Millichap Hospitality Report for Spring, 2004, noting that last year, for the first time since 2000, the demand for hotel rooms moved into positive territory. Two hotels, an ExtendedStay America and a Courtyard by Marriott, are underway in Simi Valley. Another is in planning stages in Valencia. And J.H. Snyder is considering replacing a planned office building with a hotel at the company’s Agoura Hills development, Oak Creek. Selleck Properties will grade the Newbury Park site, called The Terrace, and turn it over to owner operators who will build a Courtyard by Marriott with 120 rooms and a Marriott Town Place Suites with 93 rooms on the property located on the south side of the Ventura (101) Freeway at Giant Oak Avenue and Newbury Road. “What’s really acting as the catalyst for the new hotel commitment is Amgen and its ever-expanding employment base,” said Selleck. “It’s having a huge impact on the community in terms of demand for housing and hotels.” The events of Sept. 11 may have brought the hotel industry to a screeching halt, but it did not stop corporate headquarters like Amgen from expanding. Hotel operators have never been especially active in this region, and as a result, the number of hotel rooms has not kept pace with the needs to house visiting executives for temporary stays. The Valley as a whole “is underserved,” in the hospitality area said Robert J. Feist, vice president of Atlas Hospitality Group in Costa Mesa, noting that many hotel developers for years regarded the area as a bedroom community not particularly desirable as a hotel location. “Now everyone’s kind of catching up to try to figure out how can we piece this together to make it work better.” Today, with significant corporate headquarters addresses in Burbank, Conejo Valley and Simi Valley, the operators are turning their attention to the region. While hotel occupancy rates are still depressed from their pre-Sept. 11 levels, they have begun to rise significantly. According to PKF Consulting, the hotel occupancy rate year-to-date through April in the Valley region has reached an average of 71.71 percent, a 6.1 percent increase compared to the same period last year, when occupancies averaged 67.58 percent. Rates too are climbing. As of April, the average daily rate for a hotel room in the Valley region was $103.71, compared to $98.66 for the comparable period last year, PKF reports. Selleck bought the Newbury Park site about four years ago without entitlements and has been working with the community and city officials to design the development since then. “They liked the idea of something between their homes and the freeway to act as a buffer for the noise, and they didn’t want to see (a lot of) retail there,” said Selleck. “Instead we decided to go with business hotels. People felt the patrons would be sleeping while they were sleeping, so it turned out to be a real good cooperative effort with the neighbors, ourselves and the city.” Marriott, Selleck said, particularly liked the opportunity to construct two types of properties at the site. The Courtyard concept caters to shorter stays and the Town Place, with kitchenettes, attracts those who average a six-day stay, ideal for executives who are attending training programs at their corporate headquarters. Work on the parcel, which will also include a 32,000-square-foot retail building and a Chili’s restaurant, is expected to begin in 30 days, Selleck said. Affordable Development AMCAL Multi-Housing Inc., a Westlake Village-based developer that specializes in affordable housing, is breaking ground this week on the second phase of a Lincoln Heights housing project. The project, located next to a Gold Line station, will eventually include 523 units with 64 percent of that total devoted to affordable housing. The first phase of the project, which began construction in January, includes 101 units of senior housing, 121 units of affordable family housing and 165 condominium units that will be available for sale. The second phase will include 146 units of affordable family housing and a childcare component. The project is located east of the Golden State and Pasadena freeways interchange. Meyers Group Sold Hanley Wood LLC, a $200 million housing and construction media company, that operates magazines, Web sites and trade shows, has acquired Meyers Group, a Costa Mesa based firm that tracks residential real estate data and provides consulting services. Terms of the deal were not disclosed. Jeff Meyers, founder and CEO of Meyers Group, and the company’s management team, will remain with the new company, officials said. “We have been talking to the Meyers Group for five years and are very excited to finally close the deal,” said Michael Wood, CEO of Hanley, which is based in Washington, D.C. Noteworthy The Sherman Oaks office of Lee & Associates celebrated its 10th anniversary on June 10. Senior reporter Shelly Garcia can be reached at (818) 316-3123 .

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