Port of San Diego officials have cleared the way for a $570 million sale of the Manchester Grand Hyatt to Host Hotels & Resorts Inc.
Port commissioners on March 8 voted to approve a change in control of the 1,625-room bay-front property, San Diego’s largest hotel, from Manchester Financial Group LP to Maryland-based Host Hotels.
Host Hotels in February announced that it has agreed to purchase the hotel from the company led by local developer Douglas Manchester. Manchester’s firm built the hotel in 1992, and a second tower was added in 2003.
The port district leases land to waterfront developers and has final say on the transfer of ownership on bay-front hotels. According to a port staff report, Manchester’s firm paid “in excess of $9 million” in rent to the port district during fiscal year 2008-09, and the district is currently receiving market percentage rents, based on sales volumes.
The sale, expected to close by month’s end, will consist of a combination of cash, including the repayment of existing loans, and the issuance by Host Hotels of common and preferred operating partnership units.
Previous plans to sell the property, to Hyatt Hotels Corp. of Chicago and Sunstone Hotel Investors Inc. of Aliso Viejo, were announced last year but ultimately were called off.
Host Hotels is among the world’s largest hotel owners, with more than 100 properties. Its portfolio also includes the 1,360-room San Diego Marriott Hotel & Marina, where it recently embarked on a multi-year, $190 million renovation.
The Marriott was first developed in 1984 by Manchester, who sold his last stakes to Host in 2008.
— Lou Hirsh