LOS ANGELES—New York-based developer the Sydell Group has purchased the historic Commercial Exchange Building from a group of private investors. The developer purchased the building for an undisclosed amount and plans to completely gut and transform the property into a boutique hotel.
“The seller chose this time to sell the property because there’s a positive momentum in the market right now that’s at an all-time high,” Chris Caras, an SVP at CBRE who represented the sellers in the transaction, tells GlobeSt.com. Caras represented the sellers along with CBRE SVPs Michael Shustak and Phillip Sample. Shustak tells GlobeSt.com, “A contributing factor to these highs is the increase in demand from alternative sources. For the first time, hoteliers are looking for conversions in Downtown Los Angeles. Until recently, this would have been unheard-of. Competition from hotel, apartments and creative office developers is pushing prices to all-time highs.”
It is true that several hotel brands are rushing to fill a void in available hotel rooms. The Marriott, for example, recently opened the first dual branded hotel with Courtyard and Residence Inn rooms co-mingling on the same floor. The $172-million development opened on July 1 and is adjacent to the JW Marriott hotel already located downtown.
The buyer was attracted to this property both for its historic character and for the prime location in Downtown Los Angeles. “The level of local, national, and international interest we received on this opportunity continues to show that downtown Los Angeles is the one of the strongest and most desirable markets in the United States,” says Shustak.
Located in Downtown Los Angeles, the 13-story, 118,849-square-foot building was originally built in 1924 as an office building and one of the first buildings in the downtown skyline. Walker and Eisen designed the building; the architecture firm is also responsible for the Fine Arts Building and the Beverly Wilshire Hotel. The Owl Drug Co. occupied the building as its headquarters until 1940.