The owner of the Hollywood Palladium has reached a deal to sell the iconic music venue for $55 million, sources told the Business Journal.

Miami-based condo developer Crescent Heights is in escrow to buy the property at 6215 Sunset Blvd. from owner LSREF 2 Clover Property 4, a limited liability corporation controlled by Dallas’ Lone Star Funds.

The 58,822-square-foot music venue has hosted performers including Frank Sinatra, Jimi Hendrix and Jay-Z since it was built around 1940. Live Nation Entertainment Inc. has a 20-year lease for the venue through 2027.

The 3.5-acre property was listed in June. At the time, listing brokers John Tronson and Chris Bonbright at Avison Young Inc., and Jennifer Schwartzman at Newmark Grubb Knight Frank suggested that its 90,000-square-foot parking lot offered a development opportunity.

Crescent Heights, a national developer that primarily builds condo and apartment projects, has not announced its plans for the Palladium property and it did not return calls requesting comment. But the company is believed to want to develop a luxury apartment or condo tower at the site.

It is not clear whether the Palladium would be preserved, but its history and iconic nature may make it socially difficult to raze. However, the theater, which was extensively renovated in 2007, has no historic designation that would protect it from demolition.

Locally, Crescent Heights has developed the 232-condo-and-apartment Tara Village project in Tarzana and West Hollywood’s 40-condo Granville Tower. It owns the Century City property at 10000 Santa Monica Blvd., where it plans a 39-story apartment tower.

The possibility of building a new tower on the Hollywood property would explain the $55 million sale price tag. That equates to about $935 a square foot, which would be among the top sale prices per square foot for any L.A. building this year.

Apartments are among the hottest developments in Hollywood right now.

“As Hollywood attracts, retains and incubates tech, media and entertainment tenants, there’s growing demand for multifamily… by employees who want to be closer to their jobs,” said Arty Maharajh, senior research analyst at downtown office of brokerage Transwestern.

Indeed, only blocks away, developers Millennium Partners and Argent Ventures have plans to build two towers with 492 apartments next to the Capitol Records building on Vine Street and developer Bob Champion has plans to build two new apartment complexes totaling 470 units near Hollywood Boulevard.

The Palladium sale is expected to close by the end of the month.

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