Investment Offering
Newport Beach, CA - Sonder (Hotel Solarena)
6208 West Coast Highway | Newport Beach, CA 92663
$25,000,000
Price5.65%
Cap Rate$1,412,940
NOI25,330
± SF Offering GLADescription
SRS National Net Lease Group is pleased to offer the generational opportunity to acquire the fee simple interest (land & building ownership) in a recently remodeled, 4-story, corporate guaranteed, Sonder hotel investment property located along historic Pacific Coast Highway in Newport Beach, California (Orange County). The tenant, Sonder Hospitality USA Inc., recently executed a new 10-year lease with 2 (5-year) options to extend, demonstrating their long-term commitment to the location. The lease features 2% annual rental increases for the first 5 years of the lease and 2.5% annual increases throughout the remaining term and options, growing NOI and effectively hedging against inflation. The lease is guaranteed by Sonders Holdings Inc. (NASDAQ: SOND), a globally accoladed hospitality brand that has locations across the world, with concentrations in Denver, San Francisco, Montreal, London, and Amsterdam. The 47-room hotel has been extensively remodeled and features a new lobby, new carpet flooring throughout, new windows and screen doors, an updated plumbing system, a new roof (in progress), and more. This offering represents a rare opportunity to acquire a single tenant, coastal, trophy asset within infill area characterized extremely high barriers for new development.
Location
Hotel Solarena is strategically located along the historic Pacific Coast Highway (93,000 VPD), a primary commuter highway serving as a gateway to major markets along the West Coast. The site benefits from excellent visibility via significant street frontage along Pacific Coast Highway. Additionally, the asset is located 4 miles west of Fashion Island (1.5 million SF), Southern California’s premier luxury shopping destination featuring over 180 retail (anchored by Whole Foods, Bloomingdale’s, Nordstrom, and Macy’s), dining, and entertainment options. Further, the property benefits from close proximity to both the Balboa Peninsula and Lido Isle, two of Orange County’s most sought-after, affluent neighborhoods. Lido Isle’s median home prices is an impressive $5.1 million with average household net worths reaching $5.4 million. The Balboa Peninsula is a popular tourist destination averaging 7.3 million visitors annually, providing a steady consumer base from which to draw, and resulting in one of the lowest hotel vacancy rates in Southern California. Moreover, per CoStar’s Q1 report on Hospitality, more than 160,000 rooms were sold in the month of January 2022 in the Newport Beach / Dana Point area, a massive 56.5% increase compared to the prior year. The 5-mile area is supported by a dense population of nearly 260,000 residents and 136,000 daytime employees, boasting an extremely affluent average household income of $141,568.
Contact
Matthew Mousavi
Sr Managing Principal & Co-Head of National Net Lease
949.698.1116949.698.1116[email protected]CA #: 01732226
Patrick Luther, CCIM
Sr Managing Principal & Co-Head of National Net Lease
949.698.1115949.698.1115[email protected]CA #: 01912215