March 16--A prime hillside plot in the Hollywood Hills, which includes the landmark Yamashiro restaurant, has sold to a Beijing company for nearly $40 million, the latest in a wave of Chinese investment sweeping Los Angeles.
The sale represents the first entry into the United States for JE Group, a hotel operator known for refurbishing historic properties on its home turf.
The company said it plans to change little about the site, except for sprucing up the aging buildings, which include the restaurant, a small hotel and apartments.
"Los Angeles is a fashionable city," said JE Chairman Kang Jianyi, who was in Pasadena and spoke through a translator Tuesday. "The entire world knows Hollywood."
The 7-acre property was marketed by brokerage Colliers International as a development opportunity, but Kang said new construction would not be "appropriate."
Instead, he vowed to continue operating the restaurant and Hollywood Hills Hotel and Apartments. However, he said he is in negotiation with the current operators of Yamashiro, best known as a tourist destination, and that it was possible there would be a new restaurant operator.
Kang said some Chinese investors are part of the deal that closed Monday, though he declined to name them.
JE's purchase is just the latest marquee acquisition for a Chinese company in the United States, seen as a safe haven for diversifying holdings as China's economy slows.
On Monday, Anbang Insurance Group Co., a Chinese insurer, made an unsolicited $12.8-billion offer for Starwood Hotels Resorts Worldwide Inc., which owns the Westin and Sheraton brands.
The offer came only days after Anbang reportedly agreed to buy Strategic Hotels Resorts Inc., whose posh properties include the Hotel del Coronado near San Diego and the Loews Santa Monica Beach Hotel.
Now JE wants in on the action. The firm has seven hotels in China, and Kang said he hopes to expand beyond Los Angeles to other major cities such as Seattle, San Francisco and Miami.
The Yamashiro property, which drew interest from other international buyers, had been up for sale before.
In 2007, more than 10 descendants of Thomas O. Glover, who bought the property for $150,000 in 1948, agreed to put it on the market, along with the nearby Magic Castle, a private club for magicians they also owned.
The property was seen as a development opportunity at that time, and local residents were concerned that any development would spoil the neighborhood's ambiance and worsen traffic. But a sale was never consummated and the financial crisis hit.
Now, the descendants have decided to only sell the Yamashiro site, which also includes a vacant private residence, an administrative building and a 600-year old pagoda imported from Japan.
Kang's plans not to develop the site could help to assuage concerns over the sale. Colliers International's marketing brochure cites the land's "untapped development potential" and notes that hundreds of multifamily dwelling units could be built on the property.
Stunning photos, celebrity homes: Get the free weekly Hot Property newsletter >>
However, a backlash over development in Hollywood is in full swing. Local activists are pushing a ballot measure to crack down on what they see as the "Manhattanization" of Los Angeles.
Cranes dot the skyline and recent projects include Kilroy Realty Corp.'s $420-million office and a residential and retail complex named Columbia Square that finished construction in January.
More is likely on the way. Developer Crescent Heights, for example, hopes to break ground early next year on two 30-story residential towers known as the Palladium Residences.
"There is a lot of capital and a lot of investor interest in this incredible, dynamic area," said Stephen Algermissen, a Colliers International executive vice president who represented the sellers in the Yamashiro deal. "There are a lot of businesses going there. There are a lot of people that want to live there."
Finished in 1914 by the Bernheimer brothers, the Yamashiro building -- with its garden courtyard and koi ponds -- is part of Hollywood lore.
Millionaire silk importer Adolph Bernheimer and his brother Eugene lived at the mansion for a time and charged Angelenos 25 cents each to see their Asian art collection they kept on site.
By the 1920s, the mansion had transformed into an elite social club for the Hollywood elite, including actors Lillian Gish and Ramon Navarro. During World War II, it was mistakenly rumored to be a signal tower for the Japanese and was vandalized.
It became a restaurant, with sweeping views of the city, in the 1960s.
Kitty Wallace, a Colliers executive vice president who also represented the sellers, said interested buyers came from all over the world.
They included a group from Italy who wanted to turn it into a private club and fashion runway, as well as a principal of a Northern California tech company that hoped to base a think tank there.
"It's arguably one of the best sites west of the Mississippi," she said.
Reach me by email at andrew.khouri@latimes.com or on Twitter @khouriandrew
Staff writer Julie Makinen and researchers Nicole Liu and Yingzhi Yang in The Times' Beijing bureau contributed to this report.
