Investment Group Buys Long Beach Hilton for $77 Million

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Investment firm HEI Hospitality has acquired the Hilton Long Beach Hotel and Executive Meeting Center for $77 million.


The 12-year-old Hilton on West Ocean Boulevard was previously owned by Boston-based real estate advisory firm AEW Capital Management LP and Ensemble Investments LLC in Long Beach.


The acquisition includes a 393-room hotel, 21,600 square feet of meeting space, a recently opened 12,300-square-foot executive meeting center and an adjacent 5.6 acre parcel of land. The hotel, which will remain under the Hilton flag, also features a newly opened Daily Grill, a 4,500-square-foot health club, an outdoor pool, a gift shop and small clothing boutique.


“There’s a tremendous amount of investment in Long Beach, enhancing its desirability as a destination,” said Jin Lee, senior vice president of feasibility and investment analysis for HEI, citing The Pike at Rainbow Harbor dining and entertainment complex and Genesis Real Estate Group Inc.’s Aqua Condominiums. “I think it bodes very well for the market dynamics for hotels.”


The Hilton Long Beach is HEI’s sixth acquisition since June 2004, when it formed HEI Hospitality Fund, a $275 million private equity investment fund serving as a vehicle for university endowments. It is also its first in L.A. County.


Norwalk, Conn.-based HEI said it will invest $5 million in renovations expected to be completed by year-end. Changes include updating the remaining 80 guest rooms that were not completed in renovations begun under the previous owners, improving meeting space, pre-function areas, corridors and elevator lobbies, and upgrading the pool area.


The Hilton will be managed by HEI subsidiary Merritt Hospitality.


HEI plans to sell the 5.6-acre parcel of land, which has been zoned for residential or office construction.

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