Hotel Palomar Los Angeles, an upscale boutique hotel in Westwood, traded last month for $78.7 million, or nearly $300,000 per guest room.
Pebblebrook Hotel Trust of Bethesda, Md., acquired a 93-year leasehold interest in the property, a 264-room full-service hotel, just blocks from Westwood Village at 10740 Wilshire Blvd.
The deal, which closed Nov. 20, was struck with Behringer Harvard, a real estate investment trust out of Addison, Texas. The last time the hotel traded hands, in early 2008, it went for $33 million.
The acquisition brings Pebblebrook’s portfolio to 33 properties and marks its fifth investment in Los Angeles. It also owns the W Los Angeles – Westwood, La Meridien Delfina Santa Monica, the Redbury Hollywood Hotel and the Mondrian Los Angeles in West Hollywood.
Jon Bortz, chairman, president and chief executive of Pebblebrook, said the company was thrilled to get its hands on a luxury property in a prime location.
“The hotel is ideally located at the corner of Wilshire Boulevard and Selby Avenue, with proximity to all of the major motion picture studios, prominent dining, retail and museums and the Wilshire Corridor, which contains some of the highest-quality residential and office space in Los Angeles,” he said in a statement. “The healthy economic environment in the West Los Angeles market, which has benefited from increased international inbound travel, provides excellent long-term operating fundamentals for the hotel.”
For the 12-month period ending September 2014, the Palomar hotel operated at 87 percent occupancy with average daily room rates of $207 and revenue per available room of $180. In 2015, the company expects the hotel to have earnings before interest, taxes, depreciation and amortization of up to $5.7 million.
The hotel will continue to be managed by San Francisco hospitality company Kimpton Hotels & Restaurants.
Palisades Portfolio
Billionaire developer Rick Caruso announced last week that his Caruso Affiliated had completed the purchase of a portfolio of retail properties in Pacific Palisades along Swarthmore Avenue.
The 2.8-acre portfolio, estimated by some to be worth between $40 million and $50 million, includes nearly all of the storefronts lining Swarthmore Avenue between Sunset Boulevard and Monument Street, some nearby properties on Sunset and a 1-acre parking lot south of Swarthmore that has been zoned for multifamily use.
Caruso also announced that he was under contract to buy a Mobil gas station on the corner of Sunset and Swarthmore. That deal is not expect to close until mid-2016.
The sale of the Swarthmore Avenue properties took nearly two years to complete. Caruso first agreed to buy the portfolio in December 2012, but a discovery of toxic materials in the soil, released over 30 years by a dry cleaning business that had been housed there, slowed the sale. The developer worked with the state to come up with an approved clean-up plan before closing escrow.
Caruso said the cleanup would begin after select buildings are demolished and will take about six months.
“We’re very pleased to have finalized the clean-up plan for the property, which allows us not only to take ownership but to decisively move forward with the clean-up process, which will be a benefit for the entire neighborhood,” Caruso said in a statement.
Caruso was expected to host a community meeting this week at Palisades Charter High School to share more detailed plans for the properties.
Selling Sunset
A half-acre development site on Sunset Boulevard in West Hollywood has gone on the market for $15 million, or nearly $650 a square foot.
The property, across the street from the Standard hotel at the southeast corner of Sunset Boulevard and Sweetzer Avenue, is being offered for sale by Forsan Corp., a family-run medical supply business that has owned and been headquartered on the site since the mid-1980s. The sloping corner site consists of a driveway, a parking lot and a vacant 4,500-square-foot office building.
Benjamin Kruger, a broker in the Beverly Hills office of Teles Properties, said the seller recognized that with property values and development on the rise in the area, the site is more valuable now than ever before.
Two blocks east of the site at Sunset and Crescent Heights boulevards, developer Townscape Partners plans to build a 16-story mixed-use project with 110,000 square feet of retail and 249 apartments. A few more blocks to the west at Sunset and La Cienega Boulevard, developer CIM Group is building a two-tower James Hotel with 286 guest rooms.
“Interest has been so substantial that we anticipate the property going for over asking value,” Kruger said. “The site hasn’t been on the market very long, but already the momentum has been mind-blowing; I’ve had to upgrade my cell phone plan just to take so many calls.”
Staff reporter Bethany Firnhaber can be reached at [email protected] or (323) 549-5225, ext. 235.
