Coronado’s Posh La Meridien Being Sold to Tokyo Company

SAN DIEGO —  In yet another transaction involving the sale of a Southern California resort property to Japanese investors, the 300-room Le Meridien San Diego at Coronado luxury hotel is to be purchased by Chiyoda Finance, the hotel’s seller said Monday.

The sale price was not disclosed. Derek Thomas, director of real estate consulting at Kenneth Leventhal & Co. in San Diego said, however, that the deal may be comparable to the $280,000 per room price that Japanese investors paid for the Dana Point Resort in July. At that price, Le Meridien would be worth about $84 million.

The seller is Park at Coronado, a San Diego-based limited partnership whose general partners include George Codling, Alan Greenway, Malin Burnham and Thomas James. The partnership owns the hotel structure but leases its 16-acre bayfront site under a 50-year agreement with the San Diego Port District.

Open since June, 1988, the hotel fronting San Diego Bay on Coronado Island is managed under a 20-year contract by the French-owned Le Meridien chain, Codling said. No changes in management are planned by the prospective owners, he said.

Le Meridien is the third major resort project in San Diego County to attract Japanese investors in recent years. Sport Shinko of Osaka bought the La Costa Resort Hotel in Carlsbad for $250 million in 1987. Earlier this year, TSA International, a Honolulu-based firm controlled by a Japanese businessman, acquired a major ownership stake in the $100-million Four Seasons Aviara resort soon to start construction in Carlsbad.

In July, the 350-room Dana Point Resort in Orange County was sold to Tokyo Masuiwaya California Corp., the investment arm of Japan’s leading kimono manufacturer, for a reported $104 million.

“The Japanese are starting to realize that the trophy and primary properties in Los Angeles have already been bought out,” said Kenneth Leventhal’s Thomas. “The word we get is (Japanese investors) are focusing on prime properties outside of Los Angeles up and down the coast. So, in San Diego we can expect several more acquisitions.”

The stock in Chiyoda Finance is held by six private Japanese corporations and six publicly owned corporations, including Nippon Credit Bank, Nippon Steel, Daiwa Bank and Ohbayashi Construction, Codling said.

Chiyoda also recently acquired the 478-room Marriott Hotel in Torrance and a 30,000-square-foot office building in Palo Alto. Escrow for the Le Meridien sale is scheduled to close by late next month and is subject to approval by the port district at a meeting scheduled for Oct. 10.

The Le Meridien hotel property includes three pools, six tennis courts, meeting space and two restaurants, Marius and L’Escale. Most of the rooms go for $145 to $205 a night, a spokeswoman said.

Codling said the hotel owners did not intend to sell the property until it set out recently to secure permanent financing to replace a $44-million construction loan. In the course of pursuing the longer-term loan, the owners came into contact with the Japanese group that was “persistent” in its desire to acquire the property.

“Theirs became a price that we felt was an economically viable proposal for us to consider,” Codling said.

Greenway at first secured rights to develop the choice Coronado hotel site in the early 1980s by winning a design competition conducted by the port district. He later joined forces with Burnham, Codling and James in order to finance and develop the site.

Burnham is chairman of First National Bank of San Diego. Burnham, Codling and James are partners in ADI Properties, a San Diego real estate development firm that has built more than 1.75 million square feet of industrial and office space since its founding in 1977.

Although ADI has no hotel projects on the drawing board, Codling said the firm plans a 400-acre business park in Poway south of Poway Road and 3 miles east of Interstate 15.