Historic Santa Monica Building Eyed for Boutique Hotel

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The owner of the Santa Monica Professional building intends to convert the 77-year-old structure on Wilshire Boulevard into a boutique hotel.


Located at the southwest corner of Wilshire Boulevard and Seventh Street in Santa Monica, the ornate Spanish Colonial Revival-style office building and a nearly 1-acre rear surface lot could be redeveloped into a mid-priced business-orientated hotel with possibly 200-rooms or more.


Alex Gorby, a principal with the building’s owner Maxser & Co., has hired Santa Monica-based architect Howard Laks to design the hotel conversion, according to Maxser’s attorney, Michael Steven Klein, a partner at Klein & Weisz.


Maxser, which has owned the building since the early-1970s and also has the Jolly Roger Hotel in Marina del Rey, may have a long approvals process looming. On Sept. 12, the city designated the building, located at 710 Wilshire Blvd., as a Santa Monica landmark. The designation adds restrictions and an extra layer of approvals to the city’s notorious maze of red tape.


The hotel would be located on the eastern edge of Santa Monica’s downtown business district, where it would have little competition. Unlike the luxury beachfront hotels seven blocks west, the hotel would appeal to business travelers.


It’s not a bad time to be getting into the Santa Monica hotel business, according to PKF Consulting, which tracks hospitality trends. At $270.46 a night, Santa Monica hotels during July had the highest average daily room rate in the county after Beverly Hills.


Klein said a building that would be located behind the Santa Monica Professional Building would mimic but not copy the original structure. He also said Maxser is already willing to add public amenities to the project, such as a space for public meetings.


“Santa Monica does things carefully and thoroughly,” Klein said. “Any project like this will get thoroughly vetted and reviewed.”


Santa Monica City Manager Susan McCarthy said any possible conversion of the building into a hotel would likely stir community debate. However, she said hotels tend to generate less traffic than office buildings, and for that reason, the project may find support from nearby neighbors.


“It’s a really neat old building used primarily for offices and ground floor retail,” she said. “Certainly, it’s a building we would like to see preserved in the community, and this would seem to work toward that goal.”



Hollywood Blockbuster


CB Richard Ellis Investors Inc., a subsidiary of brokerage CB Richard Ellis Group Inc., is buying the House of Blues office tower in Hollywood for more than $83 million, according to sources close to the deal.


The transaction, scheduled to close within 30 days, values the 22-story high-rise at nearly $260 a foot a high-water mark for a Hollywood office building purchase price.


Earlier this year, CIM Group Inc. paid $227 a foot for the Stephen J. Cannell building at 7083 Hollywood Blvd. and ScanlanKemperBard Cos. paid $170 a foot in June 2004 for the CNN building at 6430 Sunset Blvd.


Asking rents in the three buildings average $2.45 a foot. However, rents could rise as older office buildings in Hollywood continue to be converted to residential uses. Hollywood office buildings averaged about 10 percent vacancy at the end of June half the vacancy of a year earlier period, according to Grubb & Ellis Co.


Archon Group LP, the Goldman Sachs Group Inc. division that sold the House of Blues building, nearly doubled its money on the sale. Archon bought the building about six years ago for about $45 million.


The building one of the better office properties in Hollywood is about 90 percent occupied by tenants with long-term leases.


Tenants include VNU NV subsidiary Nielsen Media Research; HOB Entertainment Inc., the parent company of House of Blues; and Frederick’s of Hollywood Inc., which maintains its headquarters there. There is also 20,000 square feet of completely leased ground floor space, much occupied by a Coffee Bean & Tea Leaf caf & #233;.


Cushman & Wakefield Inc.’s Steve Algermissen and Carl Muhlstein represented Archon. CB Richard Ellis Investors was represented internally.


Owners of several other Hollywood office properties have put their buildings on the market. CB Richard Ellis’ Rob Waller has listings for the Klasky Csupo Inc. building at 6357 Sunset Blvd., the former KFWB building at 6230 Yucca St. and the Eastman Kodak Co. building at 6706 Santa Monica Blvd.


Christopher Bonbright, chief executive at Ramsey-Shilling Co., has the listing for 6363 Sunset Blvd., the location of Los Angeles Film School.



Making the Grade


The Los Angeles Unified School District has hired a team of Equis Corp. and Pacifica Services Inc. to replace Trammell Crow Co. as its real estate advisor.


Scott Graham, LAUSD’s director of leasing and asset management, said when Trammell Crow’s contract expired, the School District went through a competitive bidding process that resulted in Equis and Pacifica receiving the lucrative contract.


“Trammell Crow did an excellent job,” Graham said. “Equis and Pacifica are stepping into big shoes.”


The School District has about 300 long-term leases and another 200 leases that are on a month-to-month basis, Graham said. Equis and Pacifica won’t be involved in the district’s $15.2 billion building and modernization project, which is being handled internally by LAUSD staff.


Bruce Hoffman, a senior vice president in Equis’ L.A. office, said the company is evaluating the district’s leases, looking for areas to consolidate and trim costs.


“First and foremost we want to make sure all the important dates are met, whether it’s termination, renewal or an expansion,” Hoffman said.



*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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