Tokyo-based firm picks up Residence Inn Long Beach

Koto Estate gets extended stay hotel from local investor

Residence Inn Long Beach at 4111 East Willow Street (Marriott)
Residence Inn Long Beach at 4111 East Willow Street (Marriott)

A Tokyo-based real estate firm has bought an extended stay hotel in Long Beach.

Koto Estate Co., an affiliate of Success Pro and luxury developer Satohide Corporation, bought a 178-key Residence Inn by Marriott in Long Beach for $44.5 million, property records show.

PI Properties, a limited liability company linked to Arcadia-based investor Rao Yalamanchili, sold the property.

Located at 4111 East Willow Street, the hotel traded for $250,000 per key — more expensive than two recent sales in the South Bay area. Last year, the Southwest Carpenters Trust Fund bought the 508-room Hyatt Regency at LAX for $75 million, or about $147,600 per room. Also at the airport, Lone Star Funds bought the 747-key Westin LAX for about $95,400 per key.

The deal is slightly less than recent Residence Inn sales in the area. In April, Idaho-based private investment firm Dauntless Capital Partners bought the 144-key Residence Inn in Pasadena for about $357,600 per room.

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Investors have flocked to extended-stay hotels during the pandemic, as nurses, first responders and construction workers used the properties and longer periods of travel became more popular.

Extended-stay hotels are also often cheaper to operate, as the properties offer fewer amenities and often have lower staff counts.

Koto Estate Co. is one of the few foreign investors putting money into hotels in recent months. About $400 million from foreign investment was put into hotel acquisitions in the fourth quarter of 2021 — a fraction compared to the $10.8 billion spent by U.S. private buyers, institutional buyers and public REITs, according to CBRE.

California is a popular state for hotel investment, reeling in $9.9 billion from investors in 2021 — four times the total dollar amount spent in 2020, according to hotel brokerage Atlas Hospitality Group.
Through affiliated companies, Koto Estate Co. operates a number of golf resorts in Japan and hotels in Hawaii.