May 01--The trendy Ace Hotel that opened last year in a refurbished historic building in downtown Los Angeles has been purchased by a Maryland real estate investment trust for $103 million.
The 182-room hotel near the intersection of Broadway and Olympic Boulevard will continue to be operated by Ace Hotel Group, buyer Chesapeake Lodging Trust said. The seller was Connecticut real estate investment firm Greenfield Partners.
Film luminaries Mary Pickford, Douglas Fairbanks, Charlie Chaplin and D.W. Griffith built the 13-story United Artists building at 927 S. Broadway in 1927. It held offices for rent and a theater where United Artists pictures debuted, starting with Pickford's film "My Best Girl."
The offices were converted to hotel rooms. The 1,600-seat theater has been restored and is now used as a meeting, function and entertainment venue for rent.
"The theater booking pace is up considerably from its first year and will host over 100 events in 2015," said James L. Francis, Chesapeake's chief executive. "We estimate that the theater alone will generate revenues in excess of $4.4 million and net operating profit of over $2 million."
The Ace Hotel also has a rooftop bar that stands between a swimming pool and outdoor lounge area. Off the lobby is a restaurant, coffee bar and a mezzanine-level cocktail lounge.
Greenfield Partners paid $11 million for the building in 2011. The cost of the renovation was not disclosed.
Travelers and locals have made the Ace a popular downtown destination, helping prompt more investment in the blocks nearby. Among the projects are a 680-unit apartment complex now being built and the planned redevelopment of a vast historic department store that would contain a hotel, offices and shops.
"The sale speaks volumes for the interest in downtown L.A.," said hotel consultant Alan Reay of Atlas Hospitality, who called the price per room of $566,000 "a very big number."
Investors from the U.S. and foreign countries such as China are seeking hotels in the burgeoning downtown market, he said. "We get multiple calls each week from buyers looking for properties there."
