The 200-room London West Holly-wood hotel was sold last month to New York investment firm Northwood Investors for $195 million, according to CoStar Group Inc., the highest price-per-room rate ever paid for a California hotel.
The posh hotel, just off the Sunset Strip in West Hollywood, was sold by New York real estate investment firm Blackstone Group, which put the property up for sale in April to take advantage of an improving hospitality market.
Alan X. Reay, president of Atlas Hospitality Group in Irvine, said hotels – even fancy five-star properties – typically go for closer to half the $975,000 per room that the London traded for.
“This is by far the highest price per room ever paid for a hotel in California,” he said. “It definitely signals that we’re back from the recession, and we’re back in a big, big way.”
Before the sale of the London West Hollywood, the most expensive hotel sale in Los Angeles County came last summer, when Hollywood landlord CIM Group sold the 57-room Redbury to Pebblebrook Hotel Trust of Bethesda, Md., for $34 million, or $596,000 a room.
Jonathan Wang, managing director for Northwood, said his firm was eager to enter the West Coast hospitality market.
“Northwood is pleased to have the opportunity to own and operate such a high-quality hotel in a supply-constrained hospitality market like West Hollywood,” he said in a statement. “We are excited to build upon the success of the hotel by making further capital investments in the property, beginning with the build-out of new luxury suites.”
The all-suite luxury hotel, at 1020 N. San Vicente Blvd., boasts gourmet in-room and restaurant dining by celebrity chef Gordon Ramsey, as well as a rooftop pool and lounge.
Northwood Hospitality, an affiliate of Northwood Investors, will manage the hotel.
David McCaslin, president of Northwood Hospitality, said Jeffrey Kulek will take over as general manager of the hotel, where he plans to upgrade the level of service.
“As we look to the future, it is our goal to expand and elevate this outstanding property,” he said in a statement.
Extended Stay
Swiss food company Nestlé S.A. has committed to keep its U.S. headquarters in Glendale for another eight years.
Nestlé USA announced it completed a deal last month to extend its 400,000-square-foot lease at 800 N. Brand Blvd. through 2021. The company, which had 2012 U.S. sales of $10 billion, will remain the lead tenant in the 518,000-square-foot tower it has occupied since 1990. Real estate experts estimate the extended lease, which was originally set to expire in November 2015, is valued at more than $60 million.
R. Todd Doney, vice chairman at CBRE Group Inc. in downtown Los Angeles, represented Nestlé in the deal. He said Glendale’s vacancy rate of 23.1 percent at the end of the third quarter – the highest in the Tri-Cities submarket – gave the tenant favorable negotiating power.
“Nestlé was able to take advantage of the current office market conditions to negotiate very favorable economic terms to extend the lease,” he said.
Landlord Piedmont Office Realty Trust Inc. of Atlanta acquired the 21-story property in 2002.
Donald Miller, president and chief executive of Piedmont, said the lease is a testament to the solid relationship the landlord has forged with Nestlé.
“Completing a lease extension of this size is a major win for both parties,” he said in a statement.
Homeless Housing
Single Room Occupancy Housing Corp., a non-profit real estate developer that builds and manages apartment buildings for homeless and low-income people in the downtown L.A. area known as Skid Row, opened a $28 million housing project last week.
The property – a new six-story building at 505 S. San Pedro St. – is the 29th residential building SRO has constructed in the area. Called Gateways Apartments, the building features 108 fully furnished studio apartments with full-size bathrooms and kitchens with Energy Star appliances.
Anita Nelson, chief executive of SRO, said more than 500 people have already applied to live there.
“Clearly, there is a great need,” she said. “We take great pride in providing these homes to the community.”
Residents pay subsidized rents equal to about 30 percent of their income, usually between $435 a month and $507. Each unit is about 350 square feet.
Palms design firm Dvoretzky Bardovi Bunnell Architects and Pasadena’s Westport Construction worked on the project, which was financed in part with loans from Union Bank of California and Federal Home Loan Bank of San Francisco, as well as through various city funds, including the Housing Department’s Permanent Supportive Housing Program.
The LEED Gold-certified building will offer residents on-site property management and case management services, security, laundry, computer stations, a garden and subterranean parking with 53 spots.
Staff reporter Bethany Firnhaber can be reached at [email protected] or (323) 549-5225, ext. 235.
