Updated: August 24th, 2016, 3:30 p.m.: Chicago-based Oxford Capital Group, led by hotelier John Rutledge, just acquired an 11,845-square-foot Class C office at 1400 North Cahuenga Boulevard across the street from the Cinerama Dome in Hollywood, The Real Deal has learned.
The firm plans to develop a 200-key luxury hotel on the 20,200 square feet of land it sits on. It acquired the site for $16.5 million, sources told TRD.
Slated to open in 2018, the Godfrey Hotel Hollywood would be the third hotel within the Godfrey brand, including the flagship Chicago location and sister property in Boston.
Oxford paid $825,000 a square foot for the land to the seller, the hospitality group Five Chairs, which acquired the site for $8.3 million in 2015, according to CoStar. The L.A.-based hospitality developer originally planned to build a seven-story, 175-key Tommie hotel with a retail component on the site, and got it entitled for hotel use this year. The entitled land was so profitable, however, that Five Chairs decided to sell, said Mike Condon Jr. of Cushman & Wakefield, who represented the seller along with Kelli Snyder.
“They entitled the perfect box for the market and then were victims of their own success,” Condon Jr. said. “Then, with apprehension in the development world about the Neighborhood Integrity Initiative, an already-entitled site became really desirable. I would say we saw more activity than usual because of fear.”
If 20,200 square feet sounds like a small site for 200 rooms, it is. Condon Jr. said the hotel will contain “micro units,” like the ones originally planned for the Tommie.
“It’s not about the room — you go to the room to sleep, shower and bang it out,” Condon Jr. said. “You don’t need it for much more than that. So long as you have good food and beverage options in an exciting area like Hollywood, you will see growth of micro units.”
But in an email to TRD, Sarang Peruri, a principal at Oxford, eschewed the “micro” label.
“Micro room hotels — from what I understand and in looking at brands like Citizen M, Tommie, Yotel, and our very own Hotel Felix brand — tend to be in the 130-200-square foot range for standard room size,” he said. We plan to have larger standard rooms here.”
The exact key count and unit sizes are still being finalized, he said.
This story has been updated to include comments from Oxford Capital Group.