William J. Yung III, whose privately held Kentucky company owns a vast portfolio of hotels and casinos across the country, recently added one of Downtown San Diego's most visible properties to the list , the Wyndham San Diego at Emerald Plaza.
Yung announced the acquisition of the upscale hotel, contained within the distinctive multi-tower Emerald Plaza Building, on Oct. 6. The hotel has 436 rooms and 15,000 square feet of meeting space and is on Broadway near San Diego Bay.
It was part of a $1.4 billion deal that included 13 other full-service Wyndham International Inc. hotels. Bear Stearns Commercial Mortgage Inc. and Bank of America, N.A. provided $1.1 billion in financing.
The other Wyndham hotels that Yung acquired in the deal are in Atlanta, Baltimore, Boston, Chicago, Fort Lauderdale, Fla., New Orleans, Philadelphia, Tampa, Fla., Toronto and Washington, D.C.
He said he could not break out the price he paid for the San Diego property, since it was part of a package. But sources have estimated its value at roughly $113.3 million. The hotel was built in 1991 and was last sold in 1997 for $71 million.
The Emerald Plaza hotel will receive $8 million worth of renovations and will soon take down its Wyndham flag and fly another, Yung said, adding that the upgrades, including new flooring, wall coverings in the guest rooms and common areas and new bathroom sinks, are a requirement of the prospective franchiser. However, he declined to give the name of the hotel's new brand, pending completion of the franchise agreement.
That announcement, he said, would likely be made within the next 30 days, and expectations are that the renovation would be complete by mid-2006.
"San Diego is a great market and this is a good property and we think we can be very successful with it," Yung said.
Among Largest Firms
Owned by Yung and his family, Columbia Sussex, which has its headquarters in Fort Mitchell, Ky., is one of the largest privately held hotel companies in the country. It is also the largest franchisee of full-service Marriott hotels. Factoring in the Wyndham acquisitions, the company owns 80 hotels nationwide, with a total of 26,640 rooms. Other brands include Westin, Sheraton, River Palms, Radisson and Horizon. The firm also owns nine casinos in Nevada, Mississippi and Louisiana.
Wyndham International Inc. is an affiliate of the Blackstone Group, which has offices in New York, Atlanta, Boston, Los Angeles and abroad. The 14 hotels acquired by Columbia Sussex represented about half of Wyndham's owned real estate. The 15 that remain were recently re-branded to become part of LXR Luxury Resorts and continue to be owned by affiliates of Blackstone.
The sale of the Wyndham at Emerald Plaza brings the total number of major hotel transactions completed in San Diego to eight since January.
The others are the 350-room Hilton Mission Valley; the 282-room Hilton San Diego Gaslamp Quarter; the 224-room Courtyard by Marriott in Downtown; the 145-room Courtyard by Marriott in Carlsbad; the 118-room Staybridge Suites on Innovation Drive in Mira Mesa; the 316-room Holiday Inn Mission Bay SeaWorld; and the 421-room Hyatt Regency Islandia Hotel on Mission Bay.
According to sources within the lodging industry, at least three others are on the block , the 450-room Westin Horton Plaza in Downtown; the 261-room W San Diego in Downtown's Marina District; and the 284-room Marriott Del Mar on El Camino Real, with an estimated total value of at least $276 million. Last year, the largest hotel that sold in San Diego was the 192-room Residence Inn Mission Valley, which went for $37.2 million.
According to lodging industry analysts, a resurgence in travel in the post-Sept. 11 era, coupled with a greater availability of lending capital at favorable long-term rates, has prompted the buying, selling and building of hotels all across the country, particularly in California. And San Diego, where hotel room rates are comparatively high on average, is one of the top markets in the nation, they say.