View From The Shores

View From the Shores – Spring 2017 – Excerpt:

Before we talk about the market at Coronado Shores let’s talk about the Hotel Del Coronado. Lately there have been whispers by Hotel employees that the Hotel is changing ownership again. This prompted my visit to the Sunset Bar on my way home on Friday, March 31st for a cocktail served up with the latest gossip. Well, I must say the stories I have been hearing are correct. Since I’m far from an investigative reporter, you will have to take my word on this breaking story. As I have said before, following the ownership of the Hotel has been one of my favorite stories to write about. However, the ownership seems to get more confusing each time the selling price accelerates. In 2011, when Strategic Hotels & Resorts owned the Hotel, the Blackstone Group stepped up to the plate and kept the hotel from going into a loan default for 60% ownership in the Hotel del. If you remember from my previous stories, Strategic Hotels & Resorts had a portfolio that consisted of 16 first class resorts. In 2014 Strategic was able to buy out Blackstone that returned the full ownership of the Hotel del Coronado to Strategic hands (CNBC). At the end of 2015, Blackstone Group reemerges with a $6 billion purchase price for all 16 resorts and the Hotel del Coronado that became the 17th trendy hotel. In May of 2016 the biggest news story confirmed by CNBC was Blackstone agreeing to sell all the hotels from the Strategic portfolio that Blackstone had purchased the year before to a Chinese insurance company for $6.5 billion (NBC). That sale increased Blackstone’s bottom line by a neat 1/2 billion dollars in a very short time period. Today’s news that is floating around, the Hotel del Coronado is going to be part of the Hilton family of top hotels. The irony is in 2014 Hilton sold their flagship Waldorf Astoria in New York City to the same Chinese insurance company, Anbang. Now Hilton is buying back history on the West Coast with the Hotel del Coronado. We will have to wait until the official announcement is made to find out if just the Hotel del is being sold out of the portfolio of hotels.

Next door to Hotel del is the Coronado Shores complex with sales activities that have been percolating along even with a limited inventory. No big stories, just a steady amount of sales with increased prices from last year. The following is a list of recent sales since the first of the year.

SALES ACTIVITIES (Spring 2017)

ONE BEDROOMS

El Camino 0903 $ 732,500 Jan
El Encanto 0701 $ 930,000 Feb
Las Palmas 0507 $1,462,500 Feb
La Sierra 0903 $1,525,000 Mar
El Encanto 1501 $ 895,000 Mar

TWO BEDROOMS

Las Flores 0506 $1,315,000 Jan
El Camino 1405 $2,400,000 Feb
Cabrillo 0204 $1,845,000 Feb
El Mirador 1503 $1,350,000 Feb
Las Palmas 1602 $1,288,875 Mar
El Camino 1410 $1,655,000 Mar
El Mirador 1408 $1,230,000 Mar

TWO BEDROOMS + DEN & THREE BEDROOM

Las Palmas 0109 $1,800,000 Feb
Las Palmas 1509 $2,300,000 Feb
La Sierra 1605/06 $3,450,000 Mar

BEACH SANDS TO DESERT SANDS

Coronado has one of the best beaches in the nation. It is noted for its white fine grain sand and expansive beach. The sands in Palm Desert are two and half hours’ drive over a mountain from Coronado. I have been making this drive lately that surprises me with some awesome views of the countryside once leaving Temecula. It is a short drive from Temecula to the Anza Valley on a quiet two lane road through Horse Country. Then the elevation changes to high desert. Merging onto highway 74 begins the winding road down the San Jacinto Mountain.

You can pick up the Pacific Crest Trail that starts in Mexico and ends in Canada where the signs point the way – that is, of course, if you are a hiker. This amazing drive on the mountain reaches a higher altitude then descends down to the floor of the desert. The view of the city of Palm Desert is close enough to touch. The vista is of a dramatic large street that is lined with palm trees and colorful flowers. My first turn off of Highway 74 brings me to the sands at the Marrakesh Country Club. Marrakesh has similarities to Coronado Shores that were unknown to me when I purchased a pink house in 2015 in Marrakesh. It starts with William Krisel from Los Angeles who was one of the most prominent architects of the modernism designs in Palm Springs during the 50’s and 60’s. Some of his famous homes were on display last year during the Modernism Week Tour in Palm Springs. After Mr. Krisel’s success in the desert and other projects he became part of the team that developed Coronado Shores. He was our architect in residence for many years and my go-to-guy to verify facts and design issues. When Coronado Shores was being completed in 1978, so was Marrakesh Country Club. The achievement in design during the Modernism period, which Mr. Krisel won numerous awards for, brought another architect to the desert by the name of John Elgin Woolf. He achieved fame in Beverly Hills from his famous Hollywood star clientele by designing and building their homes. What set Woolf apart from Krisel’s Mid-Century Modern was his Hollywood Regency’s theatrical style. Woolf created an opulence in design with large open spaces. He was the right designer chosen to be the architect for Marrakesh. The glamour begins with his color pallet; pink houses for Marrakesh. The mountains surrounding Marrakesh reminded the developers of Morocco, hence the name. Woolf’s dramatic entrance designed of double doors opening into soaring 10 foot ceilings that beckon you to the window walls with patio doors showing off the views of the mountains and the golf course. When I did the walk through of my new purchase, I started noticing the similarities in design materials and style used in the units at Coronado Shores. These two men might have never met, but had much in common. Krisel is 20 years Woolf’s junior. Mr. Woolf was in poor health and passed away shortly after the completion of Marrakesh. No matter where the sand is found, these two famous architects had provided me with a lifestyle that totally surrounds me with beauty from ocean to the desert.

THE PRICE ON ORANGE AVENUE

In November of last year, I spoke with a merchant whose business on C Avenue had concerns about the property he rents was for sale and there was an offer on it. The sale of these retail properties was in March, with a selling price of $22 million. The block on Orange where Mootime Creamery, Leroy’s and Costa Azul are located, C Avenue and 10th Street businesses are affected for a total of 29,665 square feet of retail buildings situated on almost 50,000 square feet of land. The seller of the property was the estate of Nina Hartwell from Las Vegas. Mrs. Hartwell was one of the original owners in the Cabrillo Tower and a member of the Coronado Yacht Club since 1971. She also owned a home on Ocean Blvd at one time. Years earlier the partnership liquidated the homes and retained the retail properties. All these business owners must be holding their breath on what might happen at the end of their leases. My opinion is the income in rents doesn’t justify the purchase price and that the property will be developed. Into what, who knows? My best guess would be a boutique hotel with restaurants and other services on the first floor.