For a hotelier synonymous with luxurious comfort, this was an acquisition right in its comfort zone.
The parent of Fairmont Hotels & Resorts, FRHI Hotels, has joined with California investment banker Richard Blum to acquire Berkeley, Calif.'s 99-year-old Claremont Hotel Club & Spa in a move that, despite a recent emphasis to more contemporary sites overseas, brings the Toronto-based hotelier back toward its roots with a grand old hotel.
The buyers are 50/50 partners on the Claremont and will make a "multimillion-dollar" investment in upgrading the 279-room property, which sits on 22 acres of valuable East Bay real estate and also includes a 1,500-member tennis club.
It will be branded as the Claremont Hotel Club & Spa, a Fairmont Managed Hotel.
Blum has strong ties with the nearby University of California, Berkeley; he's a graduate and was until this month on the board of the U.C. Regents.
Fairmont, whose 591-room namesake opened on San Francisco's Nob Hill in 1907, "has a penchant for big, iconic, historical hotels," said Mark Eble, Chicago-based regional vice president of consultant PKF Hospitality. The company also manages the Plaza in New York and the Savoy in London. "They love old prewar hotels with a capital 'H,' and the Claremont certainly fits the bill."
"Much of our recent development and planned growth consists of newbuilds globally," said Kevin Frid, president of FRHI's Americas region. He cited Azerbaijan's 9-month-old Fairmont Baku and the Fairmont the Palm in Dubai, which opened in 2012, as examples.
FRHI was formed when Saudi Prince Alwaleed and U.S. private-equity firm Colony Capital took Fairmont private and merged it with Raffles Hotels International. Qatar bought 40% of the company in 2010.
While no acquisition price was disclosed, the Claremont was likely acquired for about $155 million, according to Alan Reay, president of Irvine, Calif.-based Atlas Hospitality Group.
If so, that would mean the Claremont is changing hands at about $555,000 a room, a premium that could reflect the property's land holdings.
Frid said further land development on the property was a "possibility we will likely explore at a later date."