A Bethesda, Md., real estate investment trust has acquired the W Hollywood hotel, which has been credited with kick-starting development in the Hollywood and Vine neighborhood.
Host Hotels & Resorts paid $219 million for the 305-room hotel, more than 10,000 square feet of retail space, and seven billboards at the property, the company said last week in a press release. The purchase didn’t include the W Residences, a collection of condos.
Dallas-based hotel developer Gatehouse Capital and Norwalk, Conn., hotel owner-operator HEI Hotels & Resorts spent $600 million developing the franchise of the W Hotels & Resorts brand owned by Marriott International Inc.
The W opened in early 2010 on Hollywood Boulevard, where it is connected to the Red Line subway station, and the surrounding area has since flourished with new retail, restaurants, and hotels.
The price of more than $718,000 a room is in line with other recent transactions in the area, said Alan Reay, president of Irvine hotel brokerage Atlas Hospitality Group.
Leron Gubler, chief executive of the Hollywood Chamber of Commerce, said in an email that the sale and new development in the area shows “that the Hollywood hotel market is really coming of age, and that we have a bright future.”
The W was developed as a joint project with the Los Angeles County Metropolitan Transportation Authority, beginning construction in 2007.
There was little foot traffic in the area when the hotel opened, Manager Leon Young said in an interview last year. Despite the lack of activities outside the hotel, its occupancy hit more than 85 percent, where it has remained ever since.
The W recently advertised rooms from $225 to $468 a night on its website, compared with last year’s countywide average daily room rate of $172.
Other hotel investors and developers have begun moving in.
Microsoft Corp. billionaire Paul Allen in June bought the nearby 57-room Redbury Hotel for $41 million. Allen plans to turn it into a Hollywood outpost of his exclusive London social club, the Hospital Club, next year.
Two high-end hotels are under construction in the immediate vicinity of the W, one directly across the street.
A representative from Gatehouse didn’t return calls for comment.
Reay and Butler noted that it has been seven years since the property opened, which is on the long end of average length for a hotel investment.
“If they’ve been in something that long, it might just be a good time to step out of the investment,” Butler said.
The hotel will remain a W franchise through 2021, according to Host.
