HVS Brokerage & Advisory Retained to Exclusively Execute the Sale of the Hotel Lumberjack and the Historic Sonora Inn in Sonora, CA

HVS Brokerage & Advisory is pleased to announce that it has been exclusively retained to sell the fee-simple interest in the 34-key Hotel Lumberjack and 30-key Sonora Inn, located in Sonora, California. The limited-service hotels benefit from excellent locations, situated near one another along South Green Street and South Washington Street, respectively, in the heart of Downtown Sonora.
March 17, 2022, Los Angeles: HVS Brokerage & Advisory is pleased to announce that it has been exclusively retained to sell the fee-simple interest in the 34-key Hotel Lumberjack and 30-key Sonora Inn, located in Sonora, California. The limited-service hotels benefit from excellent locations, situated near one another along South Green Street and South Washington Street, respectively, in the heart of Downtown Sonora.

Current ownership, Sierra Nevada Hospitality, purchased the hotels in 2015. Since then, the company has completed an extensive $2.5-million renovation at the Hotel Lumberjack and has full entitlements to complete a major overhaul at the Sonora Inn. The potential renovation at the Sonora Inn includes the addition of ten guestrooms and a restaurant with bar. The unique culture and broad pricing strategies of each hotel, along with the combined set of amenities, will grant ownership a competitive advantage within the Sonora hospitality market.
 

The Hotel Lumberjack renovation was the brainchild of the Kyiv, Ukraine-based architectural firm, Balbek Bureau, with contemporary branding completed by TWID. The design brings a country-chic modernity to the guest experience. The connection between Ukraine and California is part of Hotel Lumberjack's brand DNA. The guestrooms hold true to the Lumberjack style with rustic wood accents. The guestrooms also feature modern technology, such as a 50-inch television that connects directly with guests’ favorite media subscriptions (e.g., Netflix, HBO, etc.) and video gaming consoles. A hallmark feature for each guestroom is the large working desk, which is in increasing demand given the growing “bleisure” segment, representing travelers who are seeking to combine remote work with recreational experiences.

The Hotel Lumberjack has already experienced a significant increase in business since reopening in November 2021. This hotel’s average daily rate (ADR) is anticipated to surpass $165 in 2022, driving approximately $1.4 million in rooms revenue. The Sonora Inn is expected to achieve approximately $1.1 million in rooms revenue, for a combined portfolio revenue of $2.5 million in each property’s current state.
 

The Sonora Inn’s restaurant and bar project comes with a full liquor license, a rarity in California, which will enhance not only the guest experience but also attract guests from the bustling Downtown Sonora restaurant and bar scene; a successful restaurant and bar operation should expect upwards of $2.8 million in annual revenue. The Sonora Inn’s overhaul and ten-room expansion are anticipated to drive ADR upward given that the hotel will be repositioned as a luxury boutique property, while also adding an assumed profitable food-and-beverage department to its operations. Post renovation, this hotel’s ADR should surpass $250, with the hotel achieving a gross annual revenue of approximately $5 million, equating to a combined portfolio revenue of $6.4 million.

Current ownership has gone through extensive lengths to package together the required items to remodel the Historic Sonora Inn into a truly luxurious hotel that will meet the needs of its clientele. This includes, but is not limited to, providing the complete set of blueprints, budget, and full scope of project report, permits, structural, load, and weight analyses, as well as the entire set of procured FF&E.

New ownership will be able to capitalize on a synergistic operating strategy between both hotels with a shared staffing model. Currently, the properties share a check-in desk and housekeeping laundry facility. This unique offering presents an ideal opportunity for a new owner to capture demand in both pricing segments and become the most sought-after lodging choice in Sonora.

The pricing guidance is $13 million, and both hotels must be sold together. Daniel MacDonnell is serving as the broker of record for HVS Brokerage & Advisory. The deal team also includes Eric GuerreroJames Rebullida, Fadi Rawashdeh and Kyle Peterek.

 

About HVS Brokerage & Advisory

The Brokerage & Advisory division is a specialized group within HVS that offers services related to investment sales and capital markets, focused exclusively on the hospitality industry. With a global footprint and over 40 offices nationwide, HVS’s hospitality intelligence and extensive expertise will help you achieve the results you want.
 
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