UC investment unit buys big East Bay hotel for more than $170 million

BERKELEY The University of California s commitment arm has bought a big East Bay hotel for well under its appraised value a deal that hints at lingering ailments in the Bay Area lodging sector UC Investments acting through an affiliate has paid million for the -room Residence Inn Berkeley a Marriott brand hotel according to documents filed on Oct with the Alameda County Recorder s Office Residence Inn Berkeley a Marriott-branded hotel at Center Street in downtown Berkeley seen in March Google Maps This hotel has a very good location in Berkeley noted Alan Reay president of Atlas Hospitality Group which tracks the California lodging sector Residence Inn is the the bulk profitable brand that Marriott has Related Articles Sutter Strength preps client visits at big new South Bay diagnostic campus Garbage and recycling company buys San Jose property near apartments Dublin environmentalists win tentative repeal of land grab open space measure Summary South Bay office arena healthier than struggling East Bay San Francisco Raising Cane s proposes new South San Jose location at furniture store site The -story hotel is at Center St near Shattuck Avenue in the lively downtown Berkeley district It s also about a block from the UC Berkeley campus The purchase of the hotel at Center St in downtown Berkeley occurred at a time when the Bay Area lodging arena is beset by fading values defaults and foreclosures The widening financial setbacks for the lodging industry have chilled efforts to develop hotels throughout California including in the Bay Area The UC Investments affiliate bought the -story Residence Inn Berkeley through an all-cash deal the county documents show In the hotel was appraised at million in connection with a million financing package the hotel received at that time according to a statement produced by MSCI Real Capital Analytics The hotel also had previously received million in C-PACE financing for an energy-efficient structure This means the price UC Investments paid was less than the appraised value of the hotel UC Investments got a very good deal for this hotel Reay reported The price worked out to roughly a room Reay estimated the expense to build an equivalent hotel from scratch in the modern day a metric also known as the replacement cost would be in the range of to a room which makes the price made look even better Pyramid Global Hospitality through an affiliate sold the hotel to Oakland-based UC Investments UC Investments manages the University of California s retirement endowment working capital and cash assets under the policies guidelines and performance benchmarks established by the UC Board of Regents the organization states on its website The university entity manages a portfolio that in June was valued at billion which was up from the billion portfolio as of June UC Investments states in the the bulk fresh annual summary posted on its website At present the portfolio has reached roughly billion according to the commitment organization Retirement endowment and cash assets are the main components of the portfolio UC Investments states on its website