A developer with plans to build a hotel on the site of what used to be a Macy’s department store at the Paseo Colorado retail center in Pasadena has signed a major hospitality tenant in advance of construction.
Chicago’s Hyatt Hotels Corp. signed a long-term lease last month to operate what is expected to be a 179-room select-service hotel. The company will brand the hotel a Hyatt Place, its midsize concept designed to cater to families and business travelers near airports and in suburban areas. With frontage on Green Street, the hotel is expected to primarily service those who travel to Pasadena for events at its convention center across the street. Terms of the lease deal were not disclosed.
Hyatt Place is one of at least seven hotels planned to open in the area in the next several years, which together could add as many as 1,100 guestrooms to the market and buoy the city’s convention business. The other hotels include a boutique hotel called dusitD2 Constance Pasadena, a Hampton Inn & Suites, a Residence Inn by Marriott, a Kimpton hotel as well as two others at Colorado Boulevard and Hill Street that have yet to be branded.
But before work can begin to build the Hyatt Place hotel, Michael De Leon, who manages the Paseo property for Beachwood, Ohio, landlord DDR Corp., said the developer and the city still need to hammer out some details.
“We still need to do the demolition of the old Macy’s building, which will probably take the next 12 months or so,” he said.
The project, which in addition to the hotel includes plans for a six-story mixed-use building with about 71 condominiums and 25,000 square feet of ground-floor retail space, still needs entitlements and City Council approval. Pasadena’s Planning Commission will consider at a meeting next week the developer’s request for entitlements to build the hotel.
David Reyes, deputy director of planning and community development for Pasadena, said he expects the meeting to be productive.
“From the city’s standpoint, that Macy’s building was just a big blank wall that didn’t create a very nice pedestrian environment, so we’re excited and supportive of this project,” he said.
A 35-story apartment building in downtown Los Angeles sold last week for $161 million, a record price per unit for a multifamily property in California.
ASB Capital Management, a real estate investment firm in Washington, D.C., purchased the 214-unit tower at 705 W. Ninth St. from Corona real estate company Watermarke Properties Inc. for about $750,000 a unit. The deal closed Sept. 3 and was first reported by downtown real estate blogger Brigham Yen.
Built in 2009, the South Park property originally opened as condominiums, but in the midst of the recession, the luxury units didn’t sell. In 2010, downtown L.A. developer Meruelo Maddux, now Evoq Properties Inc., sold the building to Watermarke for $110 million. Watermarke then converted the condos into apartments and, at the time of its most recent sale, the property was more than 90 percent occupied.
Units in the building, which range from one-bedroom apartments with one bathroom to three-bedroom apartments with three bathrooms, rent for between $3,050 and $15,000 a month, according to real estate data service CoStar Group Inc.
The multifamily tower was the second purchase ASB made in downtown in a matter of months. In June, the firm acquired a warehouse complex in the Arts District, which it plans to redevelop into a destination retail center.
Robert Bellinger, chief executive of ASB, said the firm made the investments in order to take advantage of a surge of young, affluent renters.
As mainland China’s economy continues to mature and investors there look to the U.S. to diversify and mitigate risk, many are looking to Los Angeles.
A recent research report by Jones Lang LaSalle Inc. found that Los Angeles attracted the second-highest level of Chinese capital of any U.S. city last year, behind only New York. Los Angeles lured approximately $780 million of the roughly $6.4 billion invested in United States real estate in 2013. New York attracted far more – nearly $3.4 billion – and third-place city Houston attracted $369 million. With only about $109 million, San Francisco, perhaps surprisingly, ranked seventh on a list of the top nine locales where Chinese investors made real estate purchases.
Michael Zietsman, managing director of capital markets at JLL, said that within greater Los Angeles, downtown was most attractive to Chinese investors because of its huge development potential and strong fundamentals. He expected it would continue to be a popular choice.
“With fewer development restrictions than other L.A. submarkets, downtown will see a number of high-profile projects that will transform the skyline,” he said. “We expect foreign capital to play a significant role in the transformation of that market into a vibrant 24-hour center.”
Staff reporter Bethany Firnhaber can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 235.