Montage Laguna Beach Seeks State Record Sale

The Montage Laguna Beach is back on the market, with an eye-opening price tag that could make it the state’s most valuable hotel property.

The 259-room luxury hotel is reported to have been put up for sale with an asking price of $700 million, or $2.8 million per key.

A sale at or near that price would shatter California’s prior record per-room sale price for a larger hotel. The current keeper of that designation is the Alila Ventana Big Sur, which traded for $158 million, or $2.5 million per key in June 2021.

Locally, the deal would far best the nearly $500 million, or about $1.2 million per key, sale of Dana Point’s Monarch Beach Resort in late 2019. That hotel is now known as the Waldorf Astoria Monarch Beach.

Reports indicate China-based Dajia Insurance Group is looking to sell the Montage along with two other U.S. hotel properties it acquired as part of its 2019 takeover of Anbang Insurance Group.

The Montage’s asking price, while remarkable, is not far-fetched, according to Alan Reay, president of Irvine-based hotel brokerage Atlas Hospitality Group.

“It could definitely go for that number. This is a trophy asset with irreplaceable real estate,” Reay told the Business Journal.

BofA Securities and Eastdil Secured have begun marketing the hotels, according to a report last week in the Wall Street Journal.

$521M Appraisal

The 259-key property was last appraised about a year ago when the owners refinanced the property in a $340 million loan transaction. It was valued around $521 million at the time.

“That figure was based on the trailing 12-month financials. With where the market is now, the value would be up exponentially,” Reay said. “I could easily see an increase of 20% to 30% from last year’s appraisal.”

Coastal hotels in desirable drive-to markets have experienced record profits since the pandemic, Reay notes, and the Montage Laguna Beach is no exception.

The shaky market environment of the past three months caused by rising interest rates would serve as the primary obstacle preventing a record price, sources note.

“This would be an incredible acquisition for a buyer without a lot of debt that’s looking for a long-term property,” Reay said.

Flagship Hotel

The hotel opened in 2003 as the flagship Montage property operated by Irvine-based Montage International. The hotel is on 30 beachfront acres and includes two pools, a 20,000-square-foot spa and three signature restaurants. It was last renovated in 2019 and employs about 600 people.

Montage International, which was honored at the Business Journal’s 23rd annual Family-Owned Business Awards in June, did not respond to a request for comment.

Recent Moves

The hotel sold in 2015 in a $360 million deal between buyer Chicago-based Strategic Hotels & Resorts and seller Ohana Real Estate Investors LLC.

The following year, China-based Anbang Insurance Group acquired Strategic and its 15 U.S. properties, including the Montage Laguna Beach and the nearby…