LA Hotel Redevelopment Lands $51M Financing
- Dec 10, 2018
HFF has arranged a $50.9 million construction loan for developer Oceans V, to transform a Los Angeles-based office building into a 180-key Cambria Hotel & Suites. Mosaic Real Estate Investors provided the loan for the full-service hotel.
Located at 419 S. Spring St., the vacant 14-story office building that will be redeveloped is 90 years old, but the developers have promised to preserve the historic building’s distinguished and architecturally significant facades.
When completed, the new Cambria Hotel & Suites will boast 2,455 square feet of meeting and event space, a restaurant and a fitness center. The property will also offer unobstructed views of the downtown Los Angeles skyline from the upper floors.
The site is situated at the corner of Spring and 4th Streets in the heart of downtown LA’s Historic Core, along Spring Street’s Gallery Row. It’s nearby the Spring Street Park and Pershing Square, an open-air park that is in the midst of a $1.5 million revitalization project.
The hotel will also be nearby boutique shopping, upscale, trendy restaurants and numerous cultural and entertainment options.
“This project is on one of the best corners in downtown Los Angeles and will be an amazing addition to downtown Los Angeles’s Historic Core,” Matthew Stewart, HFF’s director, said in a prepared statement. “It’s a truly transformative project.”
The HFF debt placement team also consisted of Blake Malecha, hotel investment advisory analyst.
A recent report by CBRE’s Hotels’ America Research group revealed that the Los Angeles market is projected to stay hot in 2019. Currently, the average daily rate at hotels in the area increased year-over-year and is forecast to rise 3.1 percent in 2018 to $187, from $181.56 in 2017. The report further expects average guestroom rates to rise 2.7 percent to $186.54 next year.
Expanding its presence
Plans call for another Cambria Hotel development close by. A joint venture of Pacific Property Partners, Choice Hotels, Sun Holdings DTLA and developer Barry Beitler are building an 18-story, 247-key hotel at 926 James M. Wood Blvd., projected to open sometime in 2019.
Both these hotels are part of a larger strategy by Choice Hotels to open additional properties in Southern California, which the company has asserted over the past year.
The hotel company is also looking to expand in Indianapolis. In November, the Cambria Hotels opened Cambria Hotel Westfield, a 152-key property in Westfield, Ind., the company’s second location in the region.
Choice Hotels, in partnership with C&O Bloomington, is also developing the Cambria Hotel Minneapolis-Saint Paul Airport, a five-story, 170-key hotel in Bloomington, Minn. Earlier in February, the company started construction on Cambria Hotel Ocean City, a 133-key property set for completion in the summer of 2019.
Image courtesy of Choice Hotels International Inc.