The buyer, who plans an approximately $30-million renovation of the property, acquired the Marriott from an affiliate of Blackstone Real Estate Acquisitions V LLC, which was represented by Jones Lang LaSalle Hotels. Arthur Buser, international director for Jones Lang LaSalle Hotels in Los Angeles, tells GlobeSt.com that the hotel generated plenty of interest in the investor community both for the specifics of the property and for its location in the heart of Downtown L.A.
"We had over 20 tours and more than a dozen bidders in the first round," Buser says. "Any time you have a hotel with management available in Los Angeles, it is highly, highly sought after."
Another factor driving investor interest was the quality of the property, which was originally built in 1983 as one of the first Sheraton Grand hotels. Buser notes that Sheraton Grand was going to be Sheraton's luxury brand and that the chain built the property to specifications that would rank it as "about a four-and-a-half star hotel."
For example, the hotel was built with nine-foot ceilings, rooms measuring more than 400 sf, floor-to-ceiling windows and other features that have come to represent some of the standards today for four- and five-star hotels. Those features translate to "excellent renovation potential," according to Buser, who says that, following renovation, the hotel "could drive RevPAR in excess of its competitive set and continue to operate as one of the best-performing downtown hotels."
Downtown Los Angeles is already enjoying steady RevPAR growth, up almost 13% in 2006, notes Arthur Adler, managing director and CEO Americas for Jones Lang LaSalle Hotels. Adler says that developments like LA Live, the Grand Avenue project and a host of other developments and redevelopments either under way or completed in Downtown L.A. will continue to accelerate hotel growth.
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