Downtown Sacramento’s Sheraton Grand Hotel could be getting new ownership.
Real estate sources say the convention hotel’s principal owner, the CIM Group of Los Angeles, has hired a real estate investment bank to sell the glossy 26-story hotel. No deal has been concluded.
A sale would follow the acquisition in September of the Citizen Hotel by a Southern California group. It could be another indication that central city properties are attracting greater interest from investors as a part of the resurgence in the downtown area.
CIM officials declined to comment on any sale, and Sacramento developer David Taylor, who built the hotel and retained an ownership interest, could not be reached for comment.
Michael Ault, executive director of the Downtown Sacramento Partnership, said he was told a sale of the Sheraton could be “imminent” but did not know the identity of any potential buyers or if the hotel would continue to be operated by Sheraton, a division of Starwood Hotels & Resorts.
CIM’s operating agreement with Sheraton expires soon, said Mike Testa, chief operating officer with the Sacramento Convention & Visitors Bureau.
Testa said a sale of the 503-room hotel, which opened in 2001 at 13th and J streets, might be good for the city.
“The Citizen sold, and what came in its place is a good product,” he said, noting that the hotel is now affiliated with the Marriott brand. “Often, new operators come in, invest more money and it’s positive.”
One source said CIM has hired Eastdil Secured, a New York-based real estate company, to handle the sale.
Shopping center makeover
Ethan Conrad is starting off the year with another big acquisition.
The prolific Sacramento buyer of commercial real estate on Friday scooped up Granite Bay Village, an 86,000-square-foot shopping center at the intersection of Douglas Boulevard and Auburn-Folsom Road.
The $9 million deal is right in the wheelhouse for Conrad, who likes purchasing neglected properties in upscale neighborhoods.
The center, now anchored by Ace Hardware and Ripped Fitness, has maintenance issues and a 35 percent vacancy rate.
The location? “It’s phenomenal,” Conrad said, noting the surrounding area has perhaps “the highest per capita household income of anywhere in the region.”
His plan is to spend about $400,000 fixing up the center over the next several months – upgrading lighting, improving landscaping, repainting and adding two monument signs, among other moves to give the center “some pop.”
“We’re taking it, on a 1-to-10 scale, from a 4 to at least an 8 and maybe a 9,” he said.
Then he will work at bringing in upscale tenants suited to the demographics of the neighborhood. In lease talks already are a “higher-end” sporting goods store and a restaurant, the investor said.
It’s a repositioning strategy Conrad has employed successfully numerous times while building a local real estate empire worth more than $500 million.
Over the past three years, for example, he has acquired the Briggs Ranch in Folsom, Folsom Pavilions and Fairway Commons in Roseville. All three shopping centers had vacancies of 50 percent or more when they were purchased. Now Briggs is 100 percent leased, and the other two are approaching that level.
Even though real estate prices have been rising, Conrad said he continues to look for deals – and thinks plenty are left in Sacramento and the Central Valley.
The Sacramento market remains 25 percent below its 2007 peak, he said, while other Central Valley towns –a recent Conrad hunting ground – are as much as 35 percent below their highs.
The investor said he recently talked with a friend who owns a building in San Francisco – a superheated market Conrad regards as likely at its peak.
“I told him to sell his building and buy some property in Sacramento,” he said.
Restaurant goes wild
Matt and Fred Haines have picked a new name for the ambitious restaurant they’re opening at the Pavilions Shopping Center on Fair Oaks Boulevard.
They’re calling it Wildwood Kitchen & Bar instead of The Grove.
“We thought it was more interesting, more exciting,” Matt Haines said of the new name, adding that it better reflects the natural wood elements, including gently curving floor boards, being planned for the space by designer Bruce Benning.
Tenant improvement work is set to begin next week on the 3,600-square-foot restaurant. It should be open by May, Haines said.
A key focus will be outdoor dining and entertainment at the adjacent 4,000-square-foot brick courtyard known for its statue of two matronly shoppers taking a break.
“There will be a great indoor-outdoor feel,” Haines said. “We’ll have garage doors opening up to the outside and it will all meld together.”