Larry Ellison, billionaire co-founder of software giant Oracle, bulked up his portfolio of high-end resorts with the $345 million purchase of a Nevada luxury spa and casino overlooking Lake Tahoe.
Ellison, whose holdings include hundreds of millions of dollars of trophy properties across the country, purchased the 422-room Hyatt Regency Lake Tahoe Resort through Lawrence Investments, according to CoStar data. Ellison's investment vehicle has been used to purchase other residential and commercial assets in the Lake Tahoe area.
At more than $817,535 a room, the deal for the property in Incline Village, Nevada, set a per-room record for hotel pricing in the Tahoe market, according to Atlas Hospitality Group President Alan Reay, who specializes in hotel sales in neighboring California. Reay told CoStar News the deal signaled rising interest among investors in the growing casino and resort sector of the hospitality business.
"This will be a great long-term investment for Larry Ellison," Reay said, adding the area has huge barriers to entry because of its limited supply and high prices. "There is a lot of interest in casinos today, and many think they will bounce back even stronger in the next few years from COVID."
Hyatt developed the resort at 111 Country Club Drive in the 1970s and has owned it ever since, according to CoStar data.
Neither Hyatt nor Lawrence Investments responded to CoStar News' requests for comment.
As the seventh-wealthiest person on the planet with a net worth of more than $117 billion, according to Forbes, Ellison has engaged in luxury real estate transactions over the years, among them the 2012 purchase of a 98% stake in Lanai, Hawaii's sixth-largest island, for $300 million. The 90,000-acre island is home to two Four Seasons resorts.
Among his high-profile purchases, Ellison has accumulated a $48 million Carbon Beach mansion in Malibu, California, along with other residential properties and the site of the Nobu Ryokan hotel in the beachside enclave just outside Los Angeles; a 23-acre estate Silicon Valley estate; and a home in San Francisco's swanky Pacific Heights neighborhood. Earlier this year, he spent $80 million to scoop up the third-largest oceanfront home in Florida's North Palm Beach area, a neighborhood that includes wealthy residents such as fellow hotelier Steve Wynn.
All told, Ellison's real estate holdings are valued at more than $1 billion, according to Forbes. News of the Hyatt purchase was first reported by The Real Deal.
In addition to several private homes, resort properties make up much of Ellison's real estate portfolio. In 2017, his investment arm paid nearly $36 million for the Cal Neva Resort & Casino that straddles the California-Nevada border at the northern end of Lake Tahoe. The property fell into bankruptcy after closing in 2013, and Ellison's hotel group has since been trying to reposition it under the Nobu Hospitality Group flag. Nobu also operates the Nobu Palo Alto Hotel, formerly the Epiphany, owned by Ellison.
Like other resort and hospitality locations, Reno's hotel market, which encompasses the Lake Tahoe area, has suffered during the pandemic. The market is home to about 20,000 rooms spread across 120 properties, according to CoStar's hospitality analytics firm STR, and accounts for 60% of the region's hospitality sector.
It hit a low point in April 2020 when occupancies collapsed to about 35%, but has since rebounded to an average of about 70%, according to STR data.
Average nightly rates in Reno have climbed more than 13.5% over the past year to nearly $111 a night. A stay at the Hyatt Lake Tahoe resort can average about $400 a night, not including the $40 property fee, according to the resort's website.
While average room and occupancy rates in the greater Tahoe area are substantially higher than the national average, only two luxury properties — including Ellison's latest acquisition — traded hands over the past year.
Amenities at the 16-acre resort include an outdoor swimming pool, salon and spa, trail access, ski services, waterfront recreation activities and restaurants.