DALLAS—Ashford Hospitality Prime Inc. has reached an agreement for an extension of the ground lease at the Hilton La Jolla Torrey Pines.
The 394-room hotel sits on 11.38 acres owned by the City of San Diego. The hotel is owned in a joint venture between subsidiaries of Ashford Prime and Park Hotels & Resorts Inc. with Ashford Prime holding a 75% interest in the joint venture. The lease, which currently expires in 2043, will be extended by 24 years and will now expire in 2067. Through this agreement, Ashford Prime was also able to secure options to further extend the ground lease by either 10 or 20 additional years depending on the amount of capital expenditures invested in the hotel during the term.
“This has been a complex transaction that has taken us some time, but we were finally able to reach mutually acceptable terms with the City of San Diego and are pleased to make a longer-term commitment to the hotel and the city,” said Richard J. Stockton, Ashford Prime’s president and CEO. “In addition to adding significant term to the current lease, this agreement also provides a significant extension opportunity should we invest in the property at similar levels as we have historically.”