Ares Partnership Pitching New Orleans Hyatt
An Ares Management partnership is marketing the massive Hyatt Regency New Orleans, setting the stage for the city’s largest hotel trade ever.
The 1,193-room property, listed with JLL, could fetch around $425 million, or $356,000/room. That would blow away the $121 million record set by last year’s sale of the 437-room Westin New Orleans Canal Place.
The Hyatt Regency has had a dramatic comeback since being substantially damaged by Hurricane Katrina in 2005, leading to its closure. Three years later, then-owner Strategic Hotels & Resorts of Chicago unloaded the shuttered hotel for just $32 million to AREA Property of New York and investor Christopher Robertson, who operates local firm Poydras Properties. That equated to a rock-bottom valuation of just $27,000/room for the hotel, which had 1,184 rooms at the time.
The duo then launched an extensive $275 million renovation of the 32-story property and reopened it in 2011 — six years after the storm. Ares Management of New York gained control in 2013, when it acquired AREA.
The renovation doubled the meeting and event space to 200,000 square feet, the most in the city. That includes a 50,000-sf exhibit hall. There’s also a mix of restaurants, a pool and a fitness center.
Financials for the property were unavailable. But comparable upper-upscale hotels in New Orleans were 77.4% occupied in the first three quarters of this year, up from 75.9% a year earlier, according to STR. Room rates grew 1.7%, to an average of $173.60. That pushed average per-room revenue up 3.8%, to $134.36.
The hotel, at 601 Loyola Avenue in the Central Business District, is connected to the Superdome and several surrounding office towers. The French Quarter is about a mile away.