[Oak Bay] The Private Residences at the Oak Bay Beach Hotel

The Oak Bay Beach Hotel is back, and according to industry reports, it's suddenly become a top-performing local hotel that's beat absolutely all expectations. Highest room rates and highest occupancy levels. That's pretty good.

 

The residences are a collection of 14 penthouses, three of which sold just weeks after hitting the market.

 

The stately Oak Bay Beach Hotel, situated at 1175 Beach Drive in Victoria's enclave of Oak Bay, ended 2016 as a top performer. The hotel's exclusive collection of waterfront penthouses has also hit the market.

 

Rising to the challenge: restructured Oak Bay Beach Hotel beats expectations

http://victoria.citi...s-expectations/

 

Oak Bay’s oceanfront Oak Bay Beach Hotel rang in the New Year as one of the region’s tourism triumphs of 2016, according to a third-party hotel occupancy and revenue brief known as a ‘star report.’

Commanding the highest room rates on southern Vancouver Island and leading the industry with above average occupancy rates, the Oak Bay Beach Hotel’s star figures confirm its tumultuous past appears to have little bearing on its future.

“I’m beyond words when I step back and reflect on how far we’ve come,” says Jason Ratzlaff, President of REV Investments, owner of the Oak Bay Beach Hotel.

“Our pre-bookings are strong, our room rates are at the forefront of the industry and we’ve already secured multiple weddings and conferences for 2017. The growth we’ve seen since the restructuring and acquisition is incredible.”

Ratzlaff is speaking to the hotel’s 2014 court-ordered financial restructuring that led his firm to purchasing the beleaguered property for $62.2-million in the spring of last year. [Full article]

How can it not be a success? Just look at all that red brick! 

Commanding the highest room rates on southern Vancouver Island and leading the industry with above average occupancy rates, the Oak Bay Beach Hotel’s star figures confirm its tumultuous past appears to have little bearing on its future.

I don't doubt that the current management is more effective than it was pre-bankruptcy, but let's not forget that it's a lot easier to run the hotel as a profitable business after writing off half the debt, including stiffing the bond holders who thought they were getting suites as bond redemptions.

Achieving the highest room rates with the lowest vacancy has far more to do with effective management than writing off debt. The new owners were once creditors, let's not forget, and they purchased the debt-ridden hotel for over $62-million on top of their earlier investment. That's a huge gamble that they are determined to recoup.

Achieving the highest room rates with the lowest vacancy has far more to do with effective management than writing off debt. The new owners were once creditors, let's not forget, and they purchased the debt-ridden hotel for over $62-million on top of their earlier investment. That's a huge gamble that they are determined to recoup.

The $62 million wasn't "on top" of their original investment, it was their original investment which was actually the primary construction loan. The total liabilities were over $120M and they took ownership of the hotel for essentially their loan amount.

I do acknowledge the improved management, but with half of the loan servicing costs eliminated that provided a lot more financial flexibility which no doubt has contributed to their success.

Right, we should be clear the new management/owner did not rip anybody off, the project was in receivership, anybody could have come in and bought it for any amount.

 

But my back-of-napkin calculations says that with $60M of debt-serving gone, they save over $300,000 per month in interest and principle payments (25-year amm.).  Lot's more room to move now that they are out under that.

The $62 million wasn't "on top" of their original investment, it was their original investment which was actually the primary construction loan. The total liabilities were over $120M and they took ownership of the hotel for essentially their loan amount.

 

REV Investment, the owner and operator of the hotel, put forward $37.5-million in cash to purchase the hotel, plus the company has secured upwards of $38.5-million in a first mortgage via Timbercreek Asset Management.

 

In other words, whatever their original investment was, they added $37.5-million in cash, plus took out a mortgage with TAM in order to purchase the OBBH.

In the process their $60M first priority construction loan was repaid. One hand paid the other.

...anyways, I'm sure the views from the penthouses is something else. My understanding is the units have sold at some of the highest square footage rates ever seen on the south Island. That's impressive.

This is definitely a growing trend on the lower Mainland, where you have mixed-use residential and hotel towers popping up, like Living Shangri-La, Fairmont Pacific Rim and the Hotel Georgia.

 

 

Hotel living back in vogue as boomers look to aging-in-place alternatives

http://victoria.citi...e-alternatives/

 

Harking back to the early 20th Century when the practice was more common, hotel living is on the cusp of a renaissance in the Capital Region as retirees look for alternatives to traditional seniors housing communities.

Aging in place doesn’t have to mean living in a seniors home, says Lorie Taylor, a retiree who recently moved with her husband to Victoria from their native Calgary.

“We fell into a dream, to be perfectly honest, when we realized that living in a hotel had unique benefits that fit our lifestyle,” Taylor said, speaking to her and her husband’s decision to purchase a suite at the Oak Bay Beach Hotel (OBBH) back in 2012.

 

...

 

And if there is one certainty with boomers, Taylor says, when a trend takes hold, watch out.

“Boomers follow. There’s just so many of us that once a trend breaks through, and if you’re not one of the trendsetters, you’re going to end up paying more for something that only years earlier was a relative bargain. You can already see this occurring at the Oak Bay Beach Hotel where two of the 14 homes sold shortly after we purchased ours.” [Full article]

Lots of upscale hotels in big cities have residences. The Carlyle in NYC, Montreal's Ritz-Carlton come to mind. Warren Beatty lived for
about 20 years in the Beverly Hills Hotel enjoying room service, housekeeping, hot and cold running starlets...the whole package.

Howard Hughes!

Howard Hughes!

Having every doorknob disinfected every 3 minutes!

501 sold today for $1,279,000 which works out to $713 per square foot.

 

 

$1,279,900