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W Hollywood hotel sells for $197M
Host Hotels & Resorts took loss after five years of ownership
Oaktree Capital Management and Trinity Fund Advisors appear to have scored a deal on a leasehold interest in the W Hollywood hotel.
The joint venture bought the 305-key hotel at 6250 Hollywood Boulevard from Maryland-based Host Hotels & Resorts for $197 million, according to the Commercial Observer.
The seller bought the property in 2017 for $220 million, or about $721,300 per room.
The new owners plan to “completely reposition” the property with upgrades and renovations to rooms and common spaces. They’re aiming to tap into demand from Hollywood’s growing tech and content production industry.
Host Hotels & Resorts CEO James F. Risoleo acknowledged that the property needed “major capital investment and associated disruption” and that the sale “obviates” the real estate investment trust’s need to do so and reduces its exposure to ground leases.
The property includes 10,000 square feet of retail space and seven billboards. The hotel itself includes restaurants and bars, along with a rooftop pool and lounge area and 33,000 square feet of event space.
The pandemic has shaken Los Angeles’ hospitality industry. Plummeting occupancy rates forced many owners to sell, creating opportunities for well-financed investors.
The pandemic killed both the Standard hotel in West Hollywood earlier this year and the Standard hotel in Downtown L.A. more recently. The Standard in West Hollywood is currently on the market.
The Luxe boutique hotel in Beverly Hills shuttered during the pandemic and earlier this month sold to LVMH, which has major hotel plans in the area. The Sofitel in Beverly Hills also changed hands earlier this year.
Hotel bookings recovered to pre-pandemic levels in the fall, but the emergence of the Omicron variant of Covid-19 may pull down the industry yet again.
[CO] —Dennis Lynch