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The Real Deal Los Angeles

Barry Sternlicht’s Starwood Capital is eyeing CIM’s James Hotel: sources

West Hollywood sale would follow record set by deal for Sunset Tower Hotel
By Katherine Clarke | April 21, 2017 01:15PM

Barry Sternlicht (credit: Getty) and a rendering of the James Hotel

It’s yet to open, but it’s already on the block.

CIM Group is close to a deal to sell the 286-room James hotel on the southeast corner of Sunset and La Cienega boulevards, sources told The Real Deal.

Barry Sternlicht’s Starwood Capital is in negotiations to buy the property for close to $975,000 a key, bringing the total prospective sale price to nearly $280 million, though there is no hard contract so far, they said. 

A spokesperson for CIM declined to comment, saying the company would not speculate on any “potential agreement it may or may not have made on any of its investments.” Starwood also declined to comment.

Hodges Ward Elliott has been quietly marketing the 10-story, 235,000-square-foot property, at 8490 Sunset Boulevard, which is part of a larger mixed-use project known as Sunset La Cienega, on behalf of CIM, sources said. The larger complex, designed by Skidmore, Owings & Merrill, has 190 residential units, 40,000 square feet of retail space and a Fred Segal store.

Rick Rush of Hodges Ward Elliott was not immediately available for comment.

One person with knowledge of the deal said that Sternlicht might convert the property into a 1 Hotel. The hospitality mogul launched the 1 brand in 2015 with the opening of the 1 Hotel South Beach. He launched another location in New York’s Brooklyn Bridge Park earlier this year.

CIM partnered with Denihan Hospitality Group to build the James, which was the first new ground-up hotel in West Hollywood in three decades, in 2013.

The West Hollywood hotel market is hotter than ever, thanks in part to a price per key record recently set by the sale of a stake in the 81-key Sunset Tower Hotel. Hotelier Jeff Klein exercised a right of first offer to buy out his former partner’s 80 percent stake in the property for roughly $95 million, or almost $1.2 million a key, sources told TRD. If it closes for that price, it would set a price-per-key record for hotel sales in West Hollywood, eclipsing Northwood Investors’ $975,000-per-room purchase of the London.

West Hollywood Mayor Lauren Meister is reportedly wary of the hotel boom sweeping her city and has even called for for a moratorium on new hotel development, pending a study on the economic impacts of a room surplus.