It was a truly rare — not just “rare” — development opportunity. An almost seven-acre plot in the Hollywood Hills that included the famed Yamashiro restaurant, which is the replica of a palace near Kyoto.
Yet the site at 1999 North Sycamore Avenue sold for less than some in the industry expected. It was snatched up by Beijing hotel operator JE Group in a sale that closed yesterday for just under $40 million. The price was almost $60 million less than the top offer, Kitty Wallace of Colliers International told The Real Deal.
Wallace, who represented the seller in the sale, said JE Group had a flexibility that allowed it to elbow out the other international buyers interested in the property. The firm was willing to pay the full amount, non-refundable, up front, regardless of what could be developed. That security was valued, because the site is tricky. It is not known what can actually be built on the hillside land, which was first developed in the early 1900s and has yet to face modern assessments, Wallace said.
“It’s an interesting site because there is a lot of potential, but all of that comes with risk,” she said. “The (Glover) family owned it since 1948, so you don’t have up-to-date surveys or up-to-date fault line zones. There were offers approaching $100 million from qualified individuals, but this buyer gave money up front without the conditions or risk.”
JE has “a history of refurbishing historic projects in Asia,” Wallace said, and plans to restore the buildings that exist on the site, including the Hollywood Hills Hotel and Apartments and a handful of smaller buildings. .
Kang Jianyi, the chairman of JE, promised to respect the history of the buildings during the renovation process, according to the Los Angeles Times.
“We are a very culturally sensitive restaurant and hotel chain,” he told the paper.
The sellers of the site were more than 10 descendants of Thomas Glover, who bought it for $150,000 in 1948. They also own the beloved Magic Castle, which was not sold in the deal.
Stephen Algermissen of Colliers also represented the sellers. Michael Albert of KW Commercial represented the buyer. Highland Realty Capital assisted with the financing.