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Business & Tech

For Sale: Iconic Del Mar Hotel

A recent flyer put out by Eastdil Secured indicates that L'Aburge Del Mar is soliciting purchase offers. Spokespeople for both companies, though, are being tight-lipped about terms of the sale.

Del Mar’s crown jewel hotel is seeking a new owner.  

L’Aburge Del Mar’s pending sale first made headlines on Aug. 6, when hotel brokerage firm Eastdil Secured put out a flier announcing they had been retained to solicit purchase offers. Although the flier does not make mention of the property’s list price, it does note the hotel underwent a 16-month, $26 million renovation project in 2009.

Spokespeople from both sides are declining further comment.

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San Diego-based hotel broker and HREC Investment Advisors Principal Michael Armstrong believes the 121-room L’Aburge Del Mar is likely to sell in a range comparable to what other, local properties have sold for.

The 53-room Rancho Valencia and 112-room La Valencia were transacted for $15 million in 2008 and $41 million in 2011, respectively. Armstrong said the hotel sales prices commonly negotiated at “price per room”. If that methodology holds, this could potentially place the sales price of the L’Aburge Del Mar between $34.2 and $44.3 million.

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He also believes the transaction is likely to close before the end of the year.

“The sale of a hotel is usually a 90 to 120 day process,” he said “When there is a conscious decision to sell it is through a structured sales process with a broker, and it is a deliberate, purposeful event.”

Those who have vacations, weddings, or events planned at L’Aburge Del Mar, he notes, need not be concerned about the property changing hands.

“When a hotel sells it is a seamless process; there is nothing that happens that happens in the eyes of the consumer,” Armstrong said. “It should not affect anyone’s stay and the transaction shouldn’t impact a group event such as a wedding or conference. The people who buy hotels expect there to be business on the books and the last thing they will want is to be disruptive to the hotel’s operation.”

The most significant change, though, could be a change in the consumer’s main point of contact. Destination Hotels and Resorts is currently contracted to manage L’Auberge. The new owner will have the option of bringing in a new team should they not wish to renew that contract.

“It is highly likely the new buyer will bring in a new management company,” Armstrong said. “It is possible they would keep the current management company, but I don’t believe this will be the case.”

Regardless as to the final terms and conditions of the sale, many Del Mar business owners are just hopeful the buyer will continue to be a good neighbor to the community.

“The L’Aburge Del Mar is the biggest employer in the Village,” said Del Mar Village Association (DMVA) Executive Director Jen Grove. “They have been a rock within the community and we hope they will continue to work with the community to make sure that residents, guests, and vacationers continue to visit the Village and to see what we have to offer.

Local attorney and DMVA Board of Directors member Bing Bush agrees.

“L’Aburge has been a strong and generous supporter of our Del Mar Community and of the DMVA,” he said. “I am sad to see [the current owner] go but look forward to forging a new relationship with the buyer.  We will certainly welcome them to the Village and hope they will be as wonderfully supportive as the current owner has been over the years.”

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