The boutique-ization of West Hollywood continues.


More than $30 million has been invested in buying and renovating two of the city's sub-150 room hotels as part of an ongoing revitalization of the wider hotel market.


LaSalle Hotel Properties, a Bethesda, Md.-based real estate investment trust, has acquired the 108-room Grafton on Sunset for $25.5 million, and Kor Hotel Group, which acquired the Summerfield Suites by Wyndham in 2002, has received a $14 million recapitalization, a portion of which will fund a $5.3 million renovation and repositioning of the 112-room hotel.


Bruce Baltin, senior vice president of PKF Consulting in Los Angeles, said the investments reflect what's happening in other parts of the country.


"West Hollywood is a healthy hotel market and it reflects a trend that a lot of companies want to invest in the boutique style hotels," he said.


The Grafton will continue to be managed by Encino-based Outrigger Lodging Services, which also manages LaSalle's 133-room Le Montrose Suite Hotel in West Hollywood.


The Summerfield Suites, on Westmount Drive, will be renamed the Chamberlain on March 1. While original plans called for a $1.8 million renovation, the amount was upped to make the hotel look and feel more like Kor's other Los Angeles County boutique hotels, the Viceroy in Santa Monica and Avalon Hotel and Maison 140 in Beverly Hills.


Kor is doing away with Summerfield's free phone calls and buffet breakfasts in exchange for the addition of an as-yet-unnamed bar/restaurant. A Jacuzzi will be removed to make way for cabanas and new furniture on the rooftop pool, which will be resurfaced. Prices will be raised.


Renovations to the lobby and guest rooms, which are already under way, will be completed by March 1, with the remainder of the hotel slated for completion by mid-March.


Real estate investment bankers Sonnenblick-Eichner Co. arranged for $14 million in non-recourse interim financing, part of which is being used for the renovation and repositioning.


"Everything is changing," said Tom Santora, vice president of sales and marketing for Kor Hotel Group. Because of the repositioning, Santora said it was likely only 10 percent to 20 percent of the hotel's current customer base would be retained.


While current room prices range from $109 to $139, new pricing will start at $169.


The average daily room rate in West Hollywood for the first 11 months of 2004 was $162.10, up 6.8 percent compared with the like period in 2003, according to PKF Consulting. Occupancy rates also rose 6.8 percent in that period to 80.2 percent, among the highest in L.A. County.


Another Zen Moment


It appears Adolfo Suaya has found a new buyer for his Zen Grill & Sake Lounge in Westwood.


The Broxton Avenue restaurant is being sold for $370,000 to A MI Restaurant Group Inc., according to the real estate newsletter Pacific Report. That compares with the $460,000 the restaurant was to fetch from Chris Won in a deal that fell apart last October.


The transfer of the liquor license, which is limited to beer, wine and sake, is pending, according to the California Department of Alcoholic Beverage Control. The transfer application was filed Jan. 4.


In 2003, Suaya had invested $600,000 in renovations designed by Dodd Mitchell. The restaurant tried for more than a year to get a full liquor license, to no avail.


The pending sale comes as Suaya has a string of new projects in the works. He partnered with Dolce Group to create Geisha House at 6633 Hollywood Blvd., and steakhouse The Lodge on La Cienega Boulevard. He is also in the process of developing L Scorpion at 6679 Hollywood Blvd. and Southern-style Memphis for the historic Janes House at 6541 Hollywood Blvd., among other things.


One Less Hamlet


Hamlet Group Inc. has sold the lease to its shuttered Hamburger Hamlet at 118-124 S. Beverly Dr., along with an adjacent 6,000-square-foot parking lot, for $3.1 million to Lenmar Development.


Sperry Van Ness, a commercial real estate brokerage in Los Angeles, represented both the buyer and the seller.


The building in Beverly Hills had housed the Hamburger Hamlet since it was built in 1950. The restaurant closed on Dec. 16.


The 10-unit Hamburger Hamlet chain is owned by L.A. real estate investor Andrew Tavakoli, who bought the chain for $10 million last March when its then-owner, Prandium Inc. in Irvine, was ordered by a bankruptcy court to auction it off.


Proceeds from the sale will be used to upgrade and expand the remaining stores. The company is currently reviewing its concept, including menu, food presentation, service, d & #233;cor and ambience.


It could not immediately be determined what Lenmar plans to do with the building and land.


Staff reporter Rebecca Flass can be reached at (323) 549-5225, ext. 230, or at rflass@labusinessjournal.com .

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