SAN JOSE – Three hotels in the Gulf region are part of a $ 3.8 billion beachfront accommodation deal that gives one hotel in the Marriott deal in downtown San Jose, worth more than $ 200 million .

Brookfield Real Estate Funds, a large investment firm, bought the Watermark Lodging Trust for $ 3.8 billion.

The deal gives Brookfield ownership of 25 hotel properties with a total of 8,163 rooms.

Brookfield estimates that it has paid an average of $ 481,300 per key – or room – for the hotel portfolio, which represents approximately one-third of resort hotels and two-thirds of full-service hotels in a number of city markets.

At this key price, the San Jose Marriott with 510 rooms at 301 S. Market St. in downtown San Jose can be estimated at $ 245 million.

However, a real estate service estimates that the price of the San Jose Marriott could be closer to $ 237 million.

“This transaction shows how Brookfield expects a strong recovery in high-end Gulf and Silicon Valley hotels and the return of the corporate traveler,” said Alan Ray, president of the Irvine-based Atlas Hospitality Group, which tracks the Gulf region. housing sector.

The 336-room Ritz-Carlton in San Francisco and the Fairmont Sonoma Mission & Spa with 226 rooms in the Sonoma wine country were also included in the deal.

The hotel business in resort areas such as Wine Country and Big Sur has returned, with hotels in these two high-end regions several times achieving record room rates.

“Sonoma is already seeing record numbers after COVID and will continue to do very well,” said Ray.

The deal is expected to be completed sometime in October-December in the fourth quarter of this year, the two companies said.

Brookfield executives believe the hotels they bought should prosper as the economy struggles to recover from the effects of the coronavirus epidemic that has devastated the accommodation and travel industries.

“Hotels and resorts of this scale and quality are difficult to reproduce,” said Lowell Baron, chief investment officer of Brookfield’s Real Estate Group.

This is mainly due to the location of the 25 hotels, according to Brookfield.

“This portfolio is well positioned, given its concentration in coastal destinations with high barriers to entry, portal cities and the Sun Belt.”

Downtown San Jose hotel is part of $3.8 billion nationwide deal

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