California Beachfront Hotel Lands $115M Refi
The site sat in the planning stage for more than 40 years.
Madison Realty Capital and Newbond Holdings provided $115 million in first mortgage debt to Ensemble Investments for its 155-key beachfront hotel, La Bahia Hotel & Spa, in Santa Cruz, Calif. Sonnenblick-Eichner Co. worked on behalf of the borrower.
The financing includes a five-year, floating-rate and non-recourse loan to refinance the project, which opened in September 2025. This underscores continued lending activity by commercial lenders in the hotel sector.
The project broke ground in 2022 following decades of planning and redevelopment efforts tied to the historic La Bahia site. Ensemble developed the project in a joint venture with Santa Cruz Seaside Co.
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La Bahia Hotel & Spa represents a more than $100 million investment in the former La Bahia Apartments site. When the building first opened in 1926, it was known as Casa del Rey Apartments. Plans to rehabilitate the building emerged in the 1980s, but the site remained in limbo for more than 40 years.
Seaside Co. purchased the site in 1984 and later partnered with Prime Group on redevelopment plans. Ensemble replaced Prime Group in 2021. Swenson acted as the general contractor for construction while Forrest Perkins was the interior designer.
When first constructed in the 1920s, Casa del Rey Apartments featured a bell tower that was preserved during development. The property includes an indoor-outdoor spa, a fitness center, a pool and a champagne lobby bar, as well as 13,720 square feet of meeting and event space. There are also 29 suites on site.
Located at 215 Beach St. in Santa Cruz, La Bahia overlooks Santa Cruz Beach with access to the boardwalk. La Bahia is near Route 1 and roughly 34 miles south of San Jose.
Investors take a bite of coastal assets
Madison Realty Capital and Newbond have remained active in California hospitality financing. In May, the firms provided Ensemble with a $110 million loan to refinance Hotel Nia, a 250-room asset in Menlo Park, Calif., adjacent to Meta’s corporate campus.
Around that same time, South Street Partners acquired Solé Miami in Sunny Isles Beach, Fla., along the coast of North Miami Beach from Mast Capital. Solé Miami includes 249 rooms and came online in 2007.
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