A jewel in Santa Fe’s hospitality sector, the 219-room Eldorado Hotel & Spa, is poised to enter a new phase in its nearly 30-year existence.
A pair of investment groups headed by local hotelier and real-estate investor Jim Long and former Albuquerque insurance and financial services executive Randy Talbot, now of Bellevue, Wash., closed on the purchase of the five-story, award-winning hotel at 309 W. San Francisco St. this week.
“This is a hotel that’s been well-loved and well-respected in the world of hospitality,” said Long, founder and CEO of Heritage Hotels & Resorts Inc. in Albuquerque. “It’s certainly an asset that’s been on our radar.”
Long’s investment group, Guadalupe Hotel Investment of New Mexico, and Talbot’s group, TFS Enchantment, are partners in the acquisition, each owning 50 percent of the property.
While TFS Enchantment has investors from Washington state, Long said a “strong majority” of the investors are New Mexicans. Among them are Sarah and Doug Brown, the soon-to-retire dean of the Anderson School of Management at the University of New Mexico, and retired insurance executive Edward Lujan and his family.
The purchase was negotiated privately with the hotel’s prior long-term owner, New York City-based Guardian Life Insurance Co. of America. The lead lender in the deal is Washington Federal with First National Bank of Santa Fe as a participating lender, Talbot said.
“It’s probably been the top-performing hotel in the state for decades,” Long said. “With ownership comes the responsibility of furthering the legacy.”
The purchase price was not disclosed, but the acquisition is likely one of the biggest commercial real estate deals of the year in New Mexico.
The average price for a hotel acquisition was projected at $137,000 a room in the United States for 2014, according to HVS Global Hospitality Services, which would put the Eldorado purchase in the neighborhood of $30 million.
Given the size, amenities and location of Eldorado Hotel & Spa, a closer guess at the price might be $200,000 a room, putting the deal in the $43.8 million range.
Because of its size and mass, Eldorado Hotel & Spa was somewhat controversial when it was built in 1984-85 on the site of Big Jo Lumber Co., according to stories in the Journal archive. The $22 million construction project, designed in pueblo style, opened in December 1985.
In addition to its 219 rooms, which includes six suites, Eldorado has a lounge, restaurant, spa, rooftop swimming pool and a host of other amenities and services. Since 1997, Eldorado has been recognized as a Four Diamond Hotel by AAA.
For a hotel in Santa Fe, its most singular asset is 22,000 square feet of meeting space, which Long said was second only to the 40,000 square feet of meeting space at the Santa Fe Convention Center. Eldorado’s largest space is the open-air Pavilion courtyard at 6,488 square feet, which can be enclosed and heated.
A promotional thrust at the hotel will be attracting national conventions, Long said.
Eldorado is Heritage Hotels & Resorts’ fourth hotel in Santa Fe, joining the 56-room Hotel Chimayo de Santa Fe, the 82-room Hotel St. Francis and the 125-room Lodge at Santa Fe.
“Heritage will have close to 500 rooms in the market,” he said. “That can be a difference maker.”
Both Long and Talbot said they are bullish on Santa Fe’s prospects as tourism and travel continues to recover from the recession and its aftermath. Talbot cited Alaska Airlines’ plans for direct nonstop flights between Seattle and Albuquerque as another building block in the tourism recovery.
An Albuquerque Academy grad, Talbot worked at the insurance company founded by his father, Talbot Financial, for more than 20 years before joining Safeco Life and moving to Washington state. A couple of corporate transactions later, he has resurrected Talbot Financial as an investment and financial services firm.