Blackstone sells Carmel resort to Geolo Capital

Blackstone Group, the buyout firm that owns Hilton Hotels Corp., sold a golf resort near Carmel to an investment firm led by John Pritzker for $20 million.

Pritzker, the founding partner of San Francisco-based Geolo Capital and son of the late billionaire Hyatt Hotels founder Jay Pritzker, said his company would spend about $25 million to upgrade Carmel Valley Ranch during the next 18 to 24 months.

The resort is spread over 400 acres, and Pritzker’s plans include room renovations and a spa.

“We’ll spend whatever we have to do to execute our concept,” Pritzker, 55, said. “As it stands now, there’s kind of no heart to the property.”

Luxury-hotel revenue has dropped for 12 months, including 28% in April from a year earlier, according to Smith Travel Research Inc. in Hendersonville, Tenn.

The value of hotel properties in default or foreclosure almost doubled to $17.3 billion in the second quarter through June 24, data compiled by New York real estate research company Real Capital Analytics Inc. show.

Occupancy at the Carmel Valley Ranch resort is “just under 50%,” Pritzker said. “Certainly we won’t increase rates until we have a level of confidence that our product merits the additional rates.”

The Carmel resort’s $20-million price tag works out to $138,889 for each of the property’s 144 rooms.

Christine Anderson, a spokeswoman for New York-based Blackstone, declined to comment.

Pritzker plans to replicate the Carmel resort renovation at properties Geolo may acquire in the future, he said.

“This is not a one-off opportunity for us,” he said.

Blackstone bought Carmel Valley Ranch in 2005 as part of its Wyndham International Inc. acquisition, valued at $3.24 billion including assumed debt.

The same year, Blackstone put some Wyndham hotels including the Carmel resort into a new company called LXR Luxury Resorts and announced plans to spend $400 million on improvements.

In addition to remodeling the rooms, Geolo will add a spa and an organic vegetable garden and build a so-called infinity pool outside the lobby overlooking the site’s dramatic views, Pritzker said. Infinity pools allow water to spill over an edge, creating an illusion that water flows out of the pool.

World Golf Hall of Famer Pete Dye designed the resort’s course, according to the Carmel Valley website. The par-70 course is 6,234 yards, according to Golflink.com.

Pritzker said he hoped to attract more families by creating separate areas for children and adults.

“The property is 400 acres, so we can have concurrent programs going on and no one’s bumping into one another,” he said.