Haley Hospitality Buys Hotel in Laguna Hills for $17M

Haley Hospitality Enterprises has snapped up a 121-room hotel in Laguna Hills for nearly $17 million after selling a hotel in Costa Mesa at a hefty profit for a hotel-to-residential conversion.

The Lake Forest-based hospitality firm led by Bhavesh Ahir bought the three-story Laguna Hills Lodge at 23932 Paseo De Valencia, the Orange County Business Journal reported, citing CoStar. The seller was locally based LHMLP.

The deal works out to nearly $140,500 per room. Brokers Oliver Shah and Justin Myers of Atlas Hospitality Group represented the buyers. It’s not clear what LHMLP paid for the property, and when.

The 87,500-square-foot economy class hotel, built in 1968, is near Interstate 5 at El Toro Road. Its rooms were recently offered for discount rates for refugees of January’s fires in Pacific Palisades and Altadena.

Hotel sales in central and south OC have cooled, according to CoStar. Sales between Newport Beach and Dana Point were $125 million during the last “volume year,” compared to a three-year average of $340 million a year.

The market didn’t prevent Haley from doing well in its sale late last year of a 120-room Travelodge by Wyndham Orange County Airport/ Costa Mesa at 1400 Bristol Street

In December, the county agreed to buy the Travelodge from Haley for conversion into homeless housing under the state’s Project Homekey program. The hotel purchase and conversion into 78 supported apartments was to cost $45 million.

The $45 million redevelopment project, dubbed Homekey Bristol, included a $4 million contribution from Costa Mesa and $3 million from neighboring Newport Beach. Orange County kicked in $7 million and nearly 50 project-based vouchers. The grants totalled $14 million.

The bulk of the money came from a Project Homekey grant from the state Department of Housing and Community Development, which kicked in $29 million for the project led by American Family Housing. The Midway City-based nonprofit developer was to revamp the motel and run it as supportive housing.

Such grants generally cover the purchase of the property. In the case of the Travelodge, that means Haley likely sold the 120-room hotel for $29 million, or $241,667 per room.

Haley Hospitality bought the Travelodge, built in 1970, in 2021 for $14 million, or $116,667 per room, according to the Central OC Times. The purchase came at the height of the pandemic, when the hotel industry tanked while tens of thousands of rooms went dark.

Three years later, the county, via a grant from the state, bought the 54-year-old motor inn for a 107 percent markup for its last traded price. And Haley walked away with a windfall.

— Dana Bartholomew