CH Projects opened the Baby Grand in Coronado on May 14 at 1315 Orange Avenue, a $17 million reimagining of the former La Avenida Inn directly across from the Hotel Del Coronado. The 31-room boutique is the San Diego hospitality group’s second hotel after The Lafayette Hotel & Club in North Park, anchored by three new F&B programs and a 6,000 square foot outdoor environment designed by Brooklyn studio Post Company, the same firm behind the Lafayette interiors.

The three F&B concepts opening with the property are Night Hawk for Greek open-fire dining in the outdoor garden, Fallen Empire as a reservation-only oyster and champagne bar hidden behind a sculpture in the lobby, and a street-level café running morning traffic, with rooms starting at $350. For operators in San Diego F&B watching the arc that took CH Projects from roughly two dozen bars and restaurants into a two-hotel hospitality operator in four years, the M&A signal here is the part of the opening worth marking.

The Lafayette to Baby Grand Arc Is the Template

CH Projects founder Arsalun Tafazoli built the company through Born & Raised, Morning Glory, Youngblood, Ironside Fish & Oyster, Polite Provisions, and roughly two dozen other bars and restaurants across San Diego County over the better part of fifteen years. The Lafayette Hotel & Club in North Park, opened in 2023, was the group’s first move into rooms, and the Baby Grand is the second.

A restaurant portfolio with a credible hotel extension carries a meaningfully different business valuation multiple than a restaurant portfolio without one. The hotel functions as a halo asset that elevates the multiple on the underlying restaurant operations when the eventual package is taken to market, because the buyer pool now includes hospitality groups, family offices, and PE-backed platforms who pay materially tighter cap rates for an operator-controlled F&B hotel than for a traditional rooms-led boutique.

The Lafayette proved the concept and the Baby Grand validates that the model travels across markets and formats with the same operator playbook. For multi-unit restaurant operators in SoCal sitting on a portfolio with five or more concepts, the question worth asking is what the right hospitality extension looks like for the brand and the corridor.

Coronado Has Its First Operator-Led Boutique

Coronado has been a single-anchor hospitality market for the better part of a century. The Hotel Del Coronado is the historic destination, a 757-room Marriott-managed property that pulls the bulk of leisure traffic onto the island, and outside the Del the island has historically run on traditional small hotels, motels, and short-term rentals.

The Baby Grand is the first operator-led F&B-anchored boutique to open in Coronado in roughly two decades. The format brings a destination dining buyer pool to Orange Avenue that the island has not had a reason to scope before, because the F&B programs at Night Hawk and Fallen Empire are operator-credible from a group with a fifteen-year track record in the San Diego market.

For operators in Coronado on Orange Avenue and adjacent corridors with a strong P&L and a clean lease, the buyer pool dynamic shifts in real time. The corridor that gets the marquee operator sets the pace for the next two years of rent, ticket averages, and exit comps in every adjacent address. The same dynamic Roseacre is creating in La Jolla is now in motion on the island.

The F&B-Anchored Hotel Stack

The Baby Grand functions as four revenue programs layered on one property, with 31 rooms running at $350 nightly and three F&B venues alongside. Night Hawk runs an outdoor dining program with a built-in destination audience pulled from the hotel and the off-island leisure traffic. Fallen Empire runs a different occasion at a different price point with reservation gating that creates scarcity premium. The café runs morning traffic for the neighborhood and hotel guests both.

For buyers underwriting hospitality assets, the cap rate compression on an F&B-controlled boutique versus a rooms-only equivalent of the same room count is substantial. The diversification of dayparts and occasions de-risks the cash flow, and the operator credibility behind the F&B programs transfers a different kind of certainty into the underwriting model than a third-party-managed restaurant arrangement carries.

The strategic question is who scales next, and if CH Projects keeps the two-hotel cadence the third project lands inside a 24 to 36 month window. For operators in adjacent markets watching the arc, the timeline is short.

For operators in Coronado, La Jolla, coastal North County, or any corridor that touches the Baby Grand’s gravity, the market is moving in your direction. The conversation worth having now is what a structured plan to sell a restaurant looks like with the right buyer profile and the right preparation. We are glad to have that confidential conversation when you are ready.

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Businesses Mentioned

Baby Grand CH Projects Night Hawk Fallen Empire The Lafayette Hotel and Club La Avenida Inn Hotel Del Coronado Born & Raised Morning Glory Youngblood Ironside Fish & Oyster Polite Provisions