Hyatt Hotels, the owner of downtown Napa’s Andaz hotel, has listed the 141-room hotel for sale, reported industry newsletter Real Estate Alert.
The trade publication estimated that the boutique hotel, located at 1450 First St., could sell for as much as $75 million. Also listed for sale is the Andaz hotel in Savannah, Ga., said the newsletter.
Even after a new owner is found, Hyatt would continue to manage the hotel as it does now, the report stated.
The buying and selling of such hotels isn’t unusual, said Don Winter, a national hotel and restaurant consultant who lives in Napa.
“It’s a pretty common strategy for Hyatt to shed assets,” Winter said. “They don’t like to tie up too much cash in hard assets. It doesn’t surprise me.”
Retaining management of the property is a key element, he said. “The management contracts are pretty much pure cash flow” to a company like Hyatt.
Likely buyers could include investors, speculators or institutions, Winter said.
“All of the underlying factors for hotels in the Napa Valley are pretty strong and favorable. For an institutional investor or private owner, downtown Napa looks pretty good as opposed to so many other areas,” he said.
“Napa is highly desirable for hotel companies because our seasonality is far less than most other destinations and we are closer to a major dense population center,” he said. The downtown hotel “is a relatively safe and promising investment.”
The Andaz Napa also includes a dining area, bar, fitness center, terrace and three meeting rooms, each with up to 1,814 square feet of space.
Andaz Napa originally opened in 2009 as an Avia brand hotel. In 2011, Hyatt Hotels bought 20 hotels, including the Avia Napa, from Avia’s parent company LodgeWorks for $661 million.
In 2012, the Avia hotel was renamed Andaz Napa. Today, other Andaz hotels are located in New York, San Diego, West Hollywood, London, the Netherlands and Shanghai. New Andaz hotels are scheduled to open in China, India, Costa Rica and Hawaii, said the Hyatt website.
With an asking price of $75 million, “it’s probably a little pricey, but these deals are always negotiated,” Winter said. “If Hyatt wants out they are going to sell at the right price. Hyatt has done the math, but investors aren’t dumb.”
To compare, in 2011 Inland American Lodging Group, Inc. bought the Napa Valley Marriott for $72 million.
Clay Gregory, CEO of Visit Napa Valley, said in many such ownership switches, hotel visitors don’t know the difference. If Hyatt remains the management company and the name Andaz doesn’t change, “consumers might not even notice,” he said.
Calls to Hyatt and listing company Eastil Secured were not returned Tuesday afternoon.