The Loews Beverly Hills, a long-troubled hotel actually located just over the border in Los Angeles, has traded hands for close to $34 million.


Morning View Hotels-Beverly Hills LLC, an entity of L.A.-based Atlantic Pearl Investments Inc., has purchased the 137-room property from a partnership of Goldman Sachs & Co. and investors advised by Prudential Real Estate Investors.


The sale didn't make the partnership a large profit. The group paid $29 million for the 12-story property eight years ago a timeframe during which most Southern California hotels have doubled in value.


"If you bought something eight years ago, you'd think you could get a better return than that," said Alan Reay, president of Irvine-based Atlas Hospitality Group, a hotel brokerage and consultancy.


While the terms of the deal weren't publicly released, sources close to the transaction said the sale results in initial returns below 3 percent indicating the buyers paid a high price compared to the hotel's revenue.


Arthur Buser, managing director and head of West Coast operations for Jones Lang LaSalle Hotels, represented the sellers in the transaction. Buser said the price reflects investors' desire for Westside hotels that can be repositioned.


"The Westside market is surging," Buser said. "This is a great time to be a hotel owner."


Still, the property has been a challenge from a marketing perspective. Making matters worse, the hotel has gone through a number of name changes in the last several years. The property was formerly called the Beverly Prescott, then it was known as the Renaissance Beverly Hills. Its most recent name change came about it July 2003.


Now the hotel could be renamed again. Hotel sources said Loews Hotel Inc.'s management contract is coming to an end, and the new owners are considering new operators.


The identity change is partly because Morning View Hotels is planning an extensive renovation of the property into a stylish boutique hotel of the caliber found along West Hollywood's Sunset Strip and in Santa Monica.


Located at 1224 S. Beverwil Drive, the hotel is near Beverly Hills and Century City, and could draw an entertainment industry clientele, Buser said.


Still, Reay isn't so sure of that vision. He said it will take a lot of cash to update the 43-year-old hotel, and the property faces competition from a number of trendy boutique hotels that will open in the next several years.


Driving off
A newly developed Carson auto dealership has traded hands for $27 million.


Superior Property of Carson LLC sold the 88,000-square-foot dealership to an undisclosed private investor, according to Michael Roth, a managing director of Colliers International, which represented the seller.


Mike Kahn, the dealership's owner, leased back the property for 20 years with two 5-year options. Further terms of the lease weren't disclosed, but the property's marketing materials proposed $150,000 a month in rent. That translates into a lease with a total consideration of $36 million.


Kahn owns a number of dealerships throughout Southern California, and Roth said Kahn intends to use the proceeds from the sale to buy more dealerships.


"This was a great way for Mike Kahn to get cash from his real estate and use that money to expand his dealership business," Roth said.


Roth was assisted by Fred Cordova and Steve Nanino of Colliers' downtown L.A. office and Robert Hoyt and Christopher Sheehan of Colliers' Irvine and South Bay office.


The Nissan dealership, located off Wilmington Avenue and the San Diego (405) Freeway at 1505 E. 223rd St., has space for more than 500 cars. The property and its signage are visible from the freeway, Cordova said.


The dealership was a "major contributor" to Nissan Motor Co. Ltd.'s record 2005 sales, Nanino said. (Nissan announced in November the company will move its North American headquarters to Tennessee from Gardena.)


The 2-year-old dealership has an expansive two-story showroom with an open mezzanine of office space and a separate service department in the back of the building.


"The dealership has ... a prime South Bay location with more than 30 auto dealerships located within 10 miles," Cordova said.


Roth said dealership owners are more commonly deciding to enter into a sale-lease back transaction to raise cash. Even Kahn may try another sale-leaseback deal.


"There will be other dealerships for sale," Roth said. "We may potentially put another dealership out for this ownership now, and I think other dealerships could follow."


*Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at afixmer@labusinessjournal.com .

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