A Dallas firm has the Doubletree hotel in Westwood under contract and plans a major renovation of the property.
Earlier this month, a bankruptcy judge ruled that Realty America Group Inc. could buy the 294-room hotel for $33 million from Lawrence, Kan.-based Linquist & Craig Hotels & Resorts Inc., which filed Chapter 11 in October 2004.
The price works out to $111,500 per room, considered relatively low for a prime Westside location. That’s because the property at 10740 Wilshire Blvd. is on ground owned by Beverly Hills-based Walter Co., which leases the land to the hotel.
Under the deal approved by the court, Realty America would either pay the amount and be assigned the property’s ground lease or Linquist & Craig could elect to keep a 15 percent stake in the property.
Kip Sowden, managing partner of Realty America Group, expects to close on the purchase of the hotel in three to four weeks. “We anticipate a major renovation of the building,” Sowden said. “We plan on turning it into a four- or five-star hotel, which we believe will be well received in the community.”
Sources said that Kimpton Hotel & Restaurant Group Inc., which doesn’t have an L.A. location yet, will manage the property under its Hotel Palomar brand.
Realty America Group has hired Kimpton to manage a property under the Palomar flag that it’s renovating in Dallas. While Sowden said the firm has close ties with Kimpton, no management contract for the hotel has been signed.
“We are looking at doing quite a few deals with Kimpton,” Sowden said. “They are one of the best hotel operators in the county, and we would be fools not to consider them.”
Kimpton spokeswoman Allison Goldstein said she couldn’t confirm whether the company may take over the property, but she said that San Francisco-based Kimpton has its sights on Los Angeles. “L.A. is a major target for Kimpton’s future growth,” Goldstein said.
Nearby Westwood Village has already proven to be a solid location for Starwood Hotels & Resorts Worldwide Inc.’s W Hotel, where the property commands some of the highest room rates and occupancy levels in the area.
“Going to a high-end boutique hotel is definitely a plus,” said Alan X. Reay, president of Atlas Hospitality Group Inc., a Costa Mesa hotel brokerage and consultancy. “When you look at how well the W Hotel has done there, this seems like a natural.”
Hotel tracking firm PKF Consulting reported that through September, rooms in West Los Angeles were, on average, fetching $194 a night, an 8.4 percent improvement for the like period a year earlier. Average occupancy through September was 78.9 percent, a 2.6 percent increase from the year-ago period.
Retail Shopping
Combined Properties Inc. continued buying up choice L.A. shopping centers with the purchase last week of Studio City Place.
The privately held Washington, D.C.-based real estate investment firm paid $36.8 million for the 108,000-square-foot shopping center at 11211 and 11230 Ventura Blvd.
Combined Properties is paying an above-average price for the property compared to other recent L.A.-area shopping center sales, according to Dan V. Riley, a first vice president with CB Richard Ellis Group Inc., which represented the seller.
“It’s a tremendous price,” Riley said. “The buyer recognizes this is a rare opportunity to acquire a property on Ventura Boulevard with good tenants and a tremendous upside not too far down the road.”
The seller is 11239 Ventura Blvd LLC, a partnership of three private investors who have owned the property for three years. The investors wouldn’t allow Riley to disclose their identities.
Studio City Place is fully leased and anchored by a Marshalls and an Office Depot. The property was completed in 1990, but the Office Depot building was added six years ago. The shopping center also contains an attached 480-space parking garage.
Combined Properties, which entered into a partnership with a Wall Street firm on the deal, intends to hold onto the shopping center for a long time, Riley said. “They plan to fix it up and hold it,” he said.
Combined, with an office in Beverly Hills, has bought six local retail centers since May. Among those deals, the company paid $30.5 million for the 65,500-square-foot Brentwood Place shopping center on Wilshire Boulevard and $12 million for the 70,000-square-foot Chatsworth Plaza Shopping Center on Canoga Avenue.
Competition for Studio City Place was fierce, with numerous offers coming in after the property had been on the market for only 10 days. Still, Riley said demand for L.A. retail centers is beginning to wane.
As interest rates have risen, buyers haven’t been able to meet the expectations of sellers, he said. “Sellers need to make a certain return, but buyers have only so much they can pay. Even the smallest ticks (in interest rates) can break a deal.”
CBRE’s Sam Alison and Chris Wilson of Wilson Commercial Real Estate assisted Riley on representing the seller. Combined Properties was represented internally.
Staying Put
Stroock & Stroock & Lavan LLP has renewed and expanded its lease in the Century City theme towers.
The New York-based law firm renewed and expanded in a 10-year deal for 62,500 square feet at 2029 Century Park East. Trammell Crow Co., which manages the towers, wouldn’t disclose the value of the lease.
However, with asking rents hovering around $3.15 a foot, according to CoStar Realty Information Inc., the deal is worth about $23.4 million to the building’s owner, a group of institutional investors advised by JPMorgan Real Estate.
Jeff Lasky, a Trammell Crow vice president of leasing, said Stroock & Stroock renewed its lease three years early. He said it has become more common for large Westside tenants to renew in advance because premium office space is becoming more expensive and harder to find in blocks of contiguous space.
Along with Lasky, the landlord was represented by Trammell Crow’s Brad Cox and Patti Gilbert. Stroock & Stroock was represented by Peter Best and Lisa St. John of Jones Lang LaSalle.
*Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at
[email protected]
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