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Friday, Dec 9, 2022

Westchester Hotel on Block After Pricey Remodel

Custom Hotel, a 250-room boutique operation in Westchester, has been put up for sale by Marathon Bank, which took ownership of the property in November after foreclosing on developer Avi Brosh.

The 8639 Lincoln Blvd. hotel could sell for $20 million, less than what Brosh spent on a remodel just three years ago.

Operated by Prism Hotels & Resorts on behalf of Marathon, Custom was a staid business hotel until Brosh’s company, by Palisades, spent $23 million on a makeover, adding a private lounge and themed floors, among other improvements.

“It’s going at a significant discount to replacement costs and to what it was bought for and renovated at the peak,” said broker John Strauss, executive vice president of Jones Lang LaSalle Hotels, who represents the bank. “It will appeal to boutique, unbranded hotel operators, and in some cases, brands may be interested in flagging this property.”

The 12-story hotel, designed by Welton Beckett, one of L.A.’s leading mid-20th century architects, could be sold by the third quarter. Strauss has received several unsolicited offers, with all offers due by early May.

Strauss thinks the hotel could trade for $75,000 to $80,000 per room. By comparison, he brokered the sale in March of the 469-room Los Angeles Marriott Downtown Hotel for $63 million, or about $134,000 per room.

“I believe with the right ownership, potential additional capital spent and proper repositioning as the market recovers, this hotel has a lot of upside potential,” he said.

Brosh declined comment last week, but in an interview in January, he blamed the economy for the loss of the property. The hotel industry is in its worst downturn in a generation.

Marathon could not be reached for comment.

Industrial Sale

A 111,638-square-foot industrial building in the City of Industry has changed hands for $9.9 million – a relatively rare event for a building that size in the San Gabriel Valley city.

Long Beach real estate investor Bechler Corp. sold the building at 14841 Don Julian Road to Sun Hing Foods Inc., a San Francisco food wholesaler and distributor.

The sale, which closed March 3, is noteworthy because industrial developer Majestic Realty Co. dominates Industry, where it is based and originally built its business.

“Majestic owns 70 percent of the property in this market and they never sell, so when you do find something it is pretty exciting,” said broker Adam Dzierzynski of Lee & Associates, who represented the buyer.

Sun Hing has other offices at 15939 Valley Blvd. in Industry about half the size of the acquisition. The firm had been looking to buy space because its Valley Boulevard lease will expire in two years, Dzierzynski said.

Soy sauce maker Lee Kum Kee Inc. is the tenant at the Don Julian property and has about two and half years remaining on its lease. Sun Hing is expected to move in once Lee Kum Kee’s lease has expired.

Dennis Keane of Lee & Associates also represented the buyer. Bechler was represented by Patrick Remolacio and Bret Hardy of Colliers International. The seller could not be reached for comment.

Pending Sale

The $3 million sale of an industrial property owned by bankrupt Namco Capital Group Inc. is expected to close next month at a hearing in U.S. Bankruptcy Court in Los Angeles.

The buyer of the 1929 Pico Blvd. property near downtown Los Angeles is Rexford Industrial LLC, a Brentwood developer and investor. Any proceeds will be used to pay off creditors of Namco, the investment company of Brentwood businessman Ezri Namvar, who is also bankrupt.

The property includes 11,000 square feet of industrial space, 14,000 square feet of offices and a 44-space parking lot. It was listed by Lee & Associates in late 2009 for $3.9 million. The property has been leased by Loomis Armored, an armored-car company, since 1978.

Loomis’ lease runs through September 2014. Rexford will continue to operate the property as an industrial facility at least until then. It also plans to carry out renovations.

“The property is a terrific location. There is lots of potential future upside in terms of how that location might be utilized,” said Rexford principal Michael Frankel. “It is surrounded by residential and retail. You can literally hit a 3-iron onto Staples Center.”

Earlier this year, AJ Industrial Properties LLC had emerged as the likely buyer for $3.1 million, according to court documents. The company could not be reached for comment to explain why that deal fell apart. Pat Ayau of Lee & Associates, who represented the seller, declined comment pending the sale’s closure.

Justin Friedman and Mike Geller of First Property Realty Corp. represented Rexford.


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