Interwest first became aware of the Crowne Plaza San Marcos Golf Resort in October 2010, submitted an offer for the hotel’s non-performing debt in December 2010, entered into contract in February 2011, and rescinded the purchase offer in March 2011 due to the borrower’s bankruptcy filing. The team at Interwest continued to foster the relationship with the lender and eventually entered an agreement to directly purchase the underlying real estate. Interwest acquired the property January 28, 2013.
The due diligence process involved numerous moving pieces including the decision for a branding partner, liquor license procurement, and the exploration of issues surrounding water rights and golf course management.
Hotel: Interwest analyzed multiple strategies for the hotel, including operating the property as an independent hotel. After exploring the options, Interwest elected to utilize Crowne Plaza because of its familiarity with the property, market, and focus on group business.
Golf course: Investigating the various issues surrounding golf course management was crucial. These efforts steered due diligence towards deeded water rights.
Water rights: By working with the local water district the team was able to track down and quantify the amount of water rights allocated to the resort. In all, it was discovered that the resort has been deeded, in perpetuity, requisite water rights to provide cost free water for the golf course.
In 2013, ownership completed an extensive rehabilitation of the historic property to bring it up to modern standards of luxury. The property received a complete guestroom renovation, upgraded meeting and banquet facilities repositioned retail, and an upgraded golf course and clubhouse.
Over the course of ownership, Interwest created additional value by identifying perimeter land parcels that were sold for development. With active management and a diligent operating strategy, Interwest increased NOI by over 500% and successfully divested the hotel portion of the property in 2018. Interwest retained ownership of the golf course and is in the process of creating additional value by entitling the last remaining land parcel for multifamily development.