San Diego’s hotel investment market continued its strong momentum from 2024, when deal volume surged by more than 50% year over year. For the 12 months ending September 2025, total sales reached $338 million—below the three-year average of $557 million, yet aligned with the broader national slowdown in hotel transactions.
Market Overview
- Deal Volume: $338M (12 months ending Sept 2025)
- Three-Year Average: $557M
- Trend: Fewer closings overall, but boosted by several large transactions
Key Transactions
- January: Noble Investment Group acquired the 334-room DoubleTree by Hilton Downtown for $67.2M ($201K/key). Renovated in 2021, the property received further upgrades and was rebranded as Courtyard San Diego Downtown.
- February: Courtyard San Diego Carlsbad (145 rooms) sold for $36M ($248K/key).
- June: Blackstone sold the 288-room Residence Inn La Jolla to Capital Insight for $79.3M ($275.5K/key).
- September: Pyramid Global Hospitality purchased the 147-room AC Hotel San Diego Downtown Gaslamp Quarter for $48.7M ($331.3K/key). The property opened in March 2023; its prior owner had secured a $40M CPACE loan earlier in 2025.
Other Notable Transactions
- Consulate Hotel (110 rooms) sold for $17.4M ($158.2K/key)
- Stardust Inn (34 rooms) acquired for $8M ($234K/key), repurposed for senior housing
Largest Recent Deal in San Diego
- Hilton La Jolla Torrey Pines (July 2024): Braemar Hotels & Resorts sold the 394-room property to JRK Property Holdings for $165M ($419K/key). The asset, under a ground lease, traded at an 8.9% cap rate based on trailing NOI. Braemar noted $40M in needed capital improvements; the sale helped resolve 2024 debt maturities.
Conversion Activity
- August 2024: San Diego Housing Commission acquired the 165-room Extended Stay America Hotel Circle for $57M ($345.6K/key)—among the highest per-key prices for a midscale asset in recent years.
Market Outlook
Transaction volume is expected to remain below historical highs due to:
- Brand-mandated PIPs
- Elevated refinancing costs
- Exit pressures from limited partners as fund timelines mature
