Marilyn Monroe was here. So were Jack Lemmon and Tony Curtis. And don't forget the Ohio Public Employees Retirement System.
What? It's the 688-room Hotel del Coronado, San Diego, which, until last month, was owned by the $52 billion, Columbus, Ohio-based pension fund. It's also the place film director Billy Wilder used in his 1959 gangster and prohibition comedy "Some Like It Hot."
CNL Hospitality Properties Inc., Orlando, Fla., and its partner, KSL Recreation Corp., La Quinta, Calif., agreed to acquire the 115-year-old beachfront property. The Del was the pension fund's most valuable property.
Lowe Enterprises Inc., Los Angeles, one of the real estate investment and management companies employed by Ohio PERS, handled the transaction for the system. The deal is expected to close by the end of the year.
According to Ohio PERS spokesman Christopher Federer, the system acquired the hotel in 1997 for $330 million, and will sell it for $383 million. Mr. Federer said the system's profit on the transaction will be roughly $29 million, but he could not give details on the returns; he said the system considers the portfolio's performance rather than individual property performance when making investment decisions.
Mr. Federer said that with the sale of the Hotel del Coronado, Ohio PERS will have sold seven of the 12 hotel properties it had once owned either fully or in part. He added that the sale was part of the system's overall strategy to reduce its direct real estate holdings and invest the proceeds in a real estate index fund. Mr. Federer said the system was not planning to sell all of its real estate holdings, but was taking some profits since its real estate portfolio had outperformed its benchmark, the National Property Hotel Index, 15.2% vs. 10.4% from inception in 1997 through June 30. As of June 30, Ohio PERS' real estate holdings totaled $4.1 billion, or 8.1% of the system's total portfolio.