French luxury giant LVMH Moet Hennessey Louis Vuitton is selling its only U.S. hotel, the El Encanto at 800 Alvarado Pl. in Santa Barbara, reported Bloomberg News. The 90-key property is being purchased by a partnership of brothers Justin and Tyler Mateen and Culver Capital for $82.2 million.
“We look at it as we’re buying 20% of the class A luxury hospitality market in Santa Barbara, which we believe is a growing market,” Tyler Mateen told Bloomberg.
The sale price per key, about $900,000, is comparable to other recent resort transactions in coastal California, where strict government regulations and a scarcity of land create high barriers to entry, according to Alan Reay, president of Atlas Hospitality Group, a hotel brokerage based in Newport Beach.
“It may look expensive today, but 10 or 20 years from now it looks like a good deal,” Reay said.
Image courtesy of Gensler.
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