Mondrian Los Angeles to Star in Pebblebrook Portfolio for $137M
- Apr 27, 2011
April 26, 2011
By Barbra Murray, Contributing Editor
Pebblebrook Hotel Trust bought eight properties last year, and with its recent commitment to purchase the Mondrian Los Angeles from Morgans Hotel Group Co. for $137 million, the REIT’s fourth transaction this year, it appears Pebblebrook is on track to surpass its 2010 acquisitions.
Carrying a Sunset Blvd. address in trendy West Hollywood, the 227-guestroom Mondrian occupies a 189,000-square-foot structure that first opened its doors as an apartment property in 1959. In 1996, Morgans transformed the building into a hotel, its first on the West Coast. Updated in 2008, the Mondrian features a list of amenities including a restaurant, a bar, a lounge and a spa. The property’s average occupancy level was 71.2 percent in 2010, well above the rising national average, which reached 54.9 percent in the first quarter of 2011, according to a report by hotel research provider STR Global.
Pebblebrook will fork over cold, hard cash to purchase the Mondrian from Morgans, which is disposing of the property as part of its transitioning to an “asset light” strategy. As per terms of the transaction, Morgans will stay onboard at the hotel as its operator under a 20-year management agreement that provides an optional 10-year extension.
The transaction is on schedule to reach completion during third quarter of the year. Pebblebrook has already added 891 rooms to its portfolio in 2011. In April, the REIT closed the $51.2 million acquisition of the 189-room Hotel Monaco Seattle and the $110 million purchase of the Westin Gaslamp Hotel in San Diego. Pebblebrook kicked off the year with the February $84 million acquisition of the 252-room Argonaut Hotel in San Francisco.