Ace Hotel Downtown LA Sells for $117M
- Dec 23, 2019
Park Hotels & Resorts has sold the 182-key Ace Hotel Downtown Los Angeles for $117 million to an undisclosed buyer. The proceeds from the transaction will be used to help repay a portion of the company’s debt and reduce leverage after the recent acquisition of Chesapeake Lodging Trust, according to Park Chairman & CEO Thomas Baltimore Jr.
Located at 929 S. Broadway, the building was first built in 1927 as a film studio backed by film stars like Mary Pickford, Douglas Fairbanks, Charlie Chaplin and DW Griffith. The use of the theater building shifted towards a Spanish movie house before being designated as a church that was used as a broadcasting site for televangelist Gene Scott. The historic property became a hotel officially in early 2014 and was then purchased by Park Hotels & Resorts from Greenfield Partners for $103 million, according to a report by the Los Angeles Times.
In May, Park signed an agreement to acquire Chesapeake Lodging Trust, another hotel REIT with 20 hotels in eight states and Washington, D.C. The deal was valued at $2.7 billion and would see Park grow its portfolio to 66 hotel assets totaling more than 35,000 keys throughout 17 states and Washington, D.C. In September, Park announced it had secured a $950 loan from Bank of America for financing the purchase.
As part of the major acquisition, Park would sell off non-core assets and did just that in June when it dropped three hotels from its portfolio in Atlanta, New Orleans and Parsippany, N.J., for $166 million. Ace Hotel Downtown Los Angeles represents their 20th sale of a non-core asset, according to Baltimore Jr. The company chair added that Park has sold $1 billion in non-core assets since forming less than three years ago.
Looking forward, Baltimore Jr. said they’ll continue to focus on their near-term goals of improving the quality of their portfolio while maintaining a low-levered balance sheet.