LOS ANGELES—Chesapeake Lodging Trust has purchased the Ace Hotel Downtown and the Theatre at Ace Hotel in Downtown Los Angeles for $103 million, or $566,000 per door. As part of the purchase agreement, Chesapeake has entered into a new agreement with the Ace Hotel, which will continue to operate at the location.

“We like the Los Angeles market. We also own the Hilton Checkers, which is up the street, so we have been studying Downtown L.A. for quite some time, and this was just an opportunistic buy for us,” Douglas W. Vicari, EVP and CFO at Chesapeake Lodging Trust, tells GlobeSt.com. “The hotel was completely repositioned and renovated, and we liked the area and what was happening both from a commercial perspective and from a residential perspective in the market. Given our history with the checkers, we felt like this was a good buy for us at this point in the cycle.”

The hotel opened in January 2014 after a two-year renovation, and is part of the “Bringing Back Broadway” campaign in Downtown L.A. The 14-story historic 1920s vintage building, which formerly served as the United Artists Building, houses the 182-room Ace Hotel and a 1,600-seat theater, which Chesapeake expects will generate revenues of $4.4 million and has a net operating income of $2 million thanks to 100 planned events already this year. “This property is relatively status quo. We see the property still ramping from its renovation, and we think the theater is going to continue to grow and bring in some more demand, which will help the hotel,” says Vicari. “Ace will stay in as the manager, and we will continue to operate as is. This purchase was really more about the opportunity and the history of the hotel combined with what we see in the marketplace. We are looking at the next three-to-five years in Los Angeles as being very, very solid.”

Although the trust likes the market, further expansion in Los Angeles will depend on acquisition opportunities, according to Vicari. “L.A. is a market that we will continue to look at and focus on,” he says. “We are more-or-less opportunistic investors. This hotel fits well with our strategy in a market that we like, and that is typically the way that we buy.”