LaSalle Adds Fourth Hotel in Market for $39M

WEST HOLLYWOOD, CA-Maryland-based hotel REIT LaSalle Hotel Properties has acquired its fourth West Hollywood property, the Chamberlain West, for $38.5 million in an all-cash transaction. LaSalle bought the 113-key all-suite hotel at 1000 Westmount Dr. from Abington Holding Co., according to industry sources.

Michael D. Barnello, president and CEO of LaSalle, said that the REIT is “very familiar with the West Hollywood market,” a theme that was also sounded in a research report from Milwaukee-based Robert W. Baird & Co., which reiterated its outperform rating and $28 price target for LaSalle’s shares following the acquisition of the Chamberlain West Hollywood.

“The property is located just off Santa Monica Boulevard and caters mainly to the music and entertainment industry,” Baird analysts David Loeb, Andrew Wittmann and Michael Bellisario said in the report. “Approximately 90% of the customers in the West Hollywood market are transient. A $4.5 million renovation was completed in July and management does not expect to spend any money on capital improvements in the near term. Outrigger Lodging Services, manager of LaSalle's other four Los Angeles-area hotels, will also manage the Chamberlain, which should help with revenue management and margins, in our view,” the Baird report said.

Barnello said that West Hollywood has been one of LaSalle’s strongest markets this year with occupancy at above 80% year-to-datw through the third quarter. The building was originally constructed in 1970 as an apartment building, subsequently converted to an all-suite hotel and was later repositioned as the Chamberlain West Hollywood in 2005.