The pocket of West Hollywood that sits north of LAX and south of Venice is attracting new hotel investment The Kor Group and the Merchant Banking Division of Goldman Sachs have teamed up to acquire the 250-room Custom Hotel, the only boutique lifestyle hotel in the area. The investor is particularly interested in this area of Los Angeles, which is quickly growing and has seen a shift in demographics.
“We are bullish on Los Angeles as a whole. So many great dynamics in the city and many diverse demand drivers in Los Angeles for hotels here, including a growing influx of creatives living/working/traveling to L.A.,” Brian De Lowe, president and co-founder of the Kor Group, tells GlobeSt.com. “We are particularly bullish on this part of West L.A. We love this pocket north of lax and south of Venice/Marina del Rey. It's a rapidly improving Westside location where we are seeing the demographics quickly shifting across all property types. Specifically on the hotel side, we were attracted to this part of West L.A. because of the supply/demand dynamics. There is very little new supply and it's so difficult to get a new hotel entitled. The growing corporate demand from Playa Vista/Silicon Beach. No fresh, design-driven lifestyle hotel with rooms under $300 per night on the Westside.”
Mid-century architect, Welton Beckett, designed the 12-story Custom Hotel, and Proper Hospitality currently manages the property. “This was a good fit for our firm because it's an existing property acquired at well below replacement costs that provides great cash flow today, but with so much potential for improvements,” says De Lowe. “It's an architectural building with great bones, and it features big rooms, some with ocean views, and amazing common areas, including a great lobby, functional meeting space, and a huge pool deck in the backyard connected to an indoor/outdoor restaurant. It's a fantastic canvas for the type of project that we like to create.”
The Kor Group will “enhance the hotel operations” by adding new services and experiences for guests. “We're making changes now to service and the guest experience and doing some upgrades in the common area, restaurant, and pool deck so guests should immediately have a more elevated experience at the property. We're still finalizing our long-term plans however.
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