Doubletree, El Segundo, CA

Closed in February of 2014, the Doubletree El Segundo (the “Hotel”) was a value-add co-sponsor investment in a 215-key full-service hotel located in El Segundo, CA. The Hotel was owned by an absentee private owner and managed by a small and unsophisticated management company. The hotel had been encumbered by unattractive debt, which caused a broken sale process and an attractive off-market buying opportunity. Falling interest rates and aggressive debt markets during the extended due diligence process created an opportunity to utilize defeasance to prepay the existing debt, further enhancing the investment.

Our business plan called for executing a brand mandated property improvement plan (PIP) upon change of ownership. While the investment thesis was primarily based on capitalizing on an attractive purchase price to generate outsized cash flow yields, the renovation provided an opportunity to enhance a few key areas of the asset. The food and beverage areas were poorly located and configured as was the fitness center. We relocated and dramatically upgraded both of these amenities as part of the PIP in addition to bringing various areas of the Hotel up to current brand standards. The co-sponsor, along with Arris, was Evolution Hospitality (“Evo”). Evo also was the hotel manager and brining their expertise in sales, revenue management and cost management was another key component to the business plan.

After completing the renovation in late 2014 and early 2015, the hotel was stabilized in late 2015. The investment was sold in 2017.

Key Investment Stats