SONOMA VALLEY -- Fairmont Hotels & Resorts sold a three-quarters stake in the 226-room Fairmont Sonoma Mission Inn & Spa to a New York-based publicly registered yet not traded real estate investment trust.
The joint venture between Carey Watermark Investors, Inc., and now-quarter-owner Fairmont invested $97.1 million in the property, financed with $44 million of debt. Carey Watermark's stake was $73.3 million, including an allocated portion of debt, according to a joint announcement Thursday.
Fairmont will continue to manage the resort under a long-term agreement.
"The completion of the hotel's renovations will enhance the resort, making it among the best luxury properties in the Sonoma/Napa market," said Michael Medzigian, chief executive officer of Carey Watermark. "In combination with the strength of the Fairmont branding, the property is positioned as a leader in all aspects. Given the strong market and the high barriers to entry, we believe that this investment is consistent with our strategy of sourcing and investing in opportunities where we can joint venture with owners to maximize the current value of the asset, create a solid financial platform for future operations and achieve attractive risk-adjusted returns for our investors."
The first phase of an approximate $10.7 million renovation is nearing completion and includes the updating of all "Heritage Rooms," a complete redesign of the lobby and the Sante fine dining room as well as the creation of a new lobby bar. Additional work is planned over the next two years, including the spa and other areas of the property
The resort is located in Sonoma Valley. The hotel was built in 1927 on the 13-acre site of the former Boyes Hot Springs Hotel, which was developed in 1895. The resort was renovated and expanded during the period from 1984 to 2000.
The resort has 12,000 square feet of flexible meeting space, a business center, fitness center, access to tennis courts, concierge services, gift shop, laundry service and valet parking.
"We are pleased to be teaming up with CWI and see this as an exciting opportunity to work with a well-respected investor that has extensive experience in the lodging industry," said Jennifer Fox, President of Fairmont Hotels & Resorts. "The Fairmont Sonoma Mission Inn & Spa is a remarkable asset and we are convinced there are solid growth opportunities given the hotel's renovation plans and Fairmont's strong brand presence in the California market."