CBRE Investors paid approximately $83 million, or $164,000 a room, a source with direct knowledge of

Los Angeles-based CBRE Global Investors got such a good deal on the 506-room San Jose Marriott Hotel that it has made the downtown Convention Center property orlando cheap hotels its first hotel acquisition in the country for more than a decade.
CBRE Investors paid approximately $83 million, or $164,000 a room, a source with direct knowledge of the transaction confirmed. orlando cheap hotels The capitalization rate, or investment yield, was 6.2 percent based on 2012 net operating income, a second industry source said.
The developers, Chicago-based Walton Street Capital and San Rafael-based orlando cheap hotels SCS Advisors, broke ground on the more than $100 million, 301 S. Market St. hotel in late 2000 and opened in 2003 to the lingering effects of both the dot-com bust and the September orlando cheap hotels 2001 terrorist attacks.
"We think that San Jose is an underappreciated hotel market," said John Sauter, a managing director with CBRE Investors. "There is going to be no new supply that the Marriott property will be competing with in the future. The 125,000-square-foot expansion of the convention center will only help our property by the simple orlando cheap hotels fact that our property is connected to it. The convention business is a good part of the business group that comes to the Marriott."
San Jose is in the final stages of a $130 million expansion and improvement program for its convention center, adding a 35,110-square-foot, orlando cheap hotels second-story Grand Ballroom fronted by huge windows that introduce floods of natural light. The addition orlando cheap hotels brings the convention space to 550,000 square feet total including 43 individual meeting rooms and 165,000 square feet of contiguous exhibit space.
The hotel purchase represents CBRE Investors' second major downtown orlando cheap hotels San Jose acquisition in the last six months. It paid $95.6 million to buy 50 W. San Fernando St., a 344,000 square-office building in downtown San Jose, according to a document from the Orange County Employees Retirement System.
The seller of the San Jose Marriott was Newark, N.J., -based Prudential Real Estate Investors. orlando cheap hotels The real estate investment management business of Prudential Financial Inc. purchased the debt on the property in 2010 and foreclosed in 2011. PREI declined comment for this story.
The property's current occupancy rate is about the average for San Jose hotels, in the range of 70 percent to 75 percent, Sauter said. CBRE Investors plans property orlando cheap hotels renovations, including sprucing up the lobby and meeting space and some work on the rooms, as well. The amount to be spent on the renovation hasn't been determined.
CBRE Investors acquired the two properties in San Jose for its commingled fund CBRE Strategic Partners U.S. Value 6. It's likely that the San Jose Marriott will be the only San Francisco Bay Area hotel that will be acquired. "I would think there is a good chance that this will be the only area hotel in the fund for diversification reasons. But we may find another property that we think would make sense," Sauter said. The fund is targeting the top 25 U.S. metropolitan areas for investment.
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