Hotel Intelligence Los Angeles December 2012 Market Insight

®
abc
Real value in a changing world
Hotel Intelligence
Los Angeles
Hotel
Intelligence
December
2012
Los Angeles
October 2011
Market Insight
Strong hotel
performance fundamentals and continued
Market
Insight
investor interest in the Los Angeles market underpin a healthy
Hotel transaction
volume
in Los
Angeles
County expected
in year-to-date
transactions
market,
with
deal volume
to reach
October 2011 increased by 77% over 2010 levels amid strong
to $450
investor$400
interest
in the million
market.in 2013.
Jones Lang LaSalle Hotels know how
Contributors
John Strauss
Managing Director
john.strauss@am.jll.com
James Stockdale
Senior Vice President
james.stockdale@am.jll.com
Tony Muscio
Senior Vice President
anthony.muscio@am.jll.com
Lauro Ferroni
Vice President
lauro.ferroni@am.jll.com
Corey Hamabata
Associate
corey.hamabata@am.jll.com
Willis Cheng
Analyst
willis.cheng@am.jll.com
Emily Lustig
Analyst
emily.lustig@am.jll.com
Jones Lang LaSalle Hotels is a global real estate services firm focused exclusively on hotels & hospitality. We provide acquisition and financing
advice, valuations, investment sales and asset management for luxury hotels, select service and budget hotels, smaller hotels and pubs, from
single assets to large portfolios and mixed-use developments.
In the last five years we completed nearly 4,000 advisory and valuation assignments and more sale, purchase and financing transactions than any
other hotels real estate firm in the world …worth over $30 billion. With 44 offices in 20 countries and 265 hotels real estate experts, no other firm is
better connected. Through our depth and breadth of research and experience, with 75 Research Reports each year, we know the market at every
level, we know the players and we know how to get results.
www.joneslanglasallehotels.com
December 2012 | Hotel Intelligence: Los Angeles 1
Los Angeles – strong increases in lodging fundamentals
conducive to active transactions market in 2013
Los Angeles is one of the largest and most diverse lodging markets in
the world, with nearly 1,000 properties comprising more than 98,000
rooms.1 The market benefits from a broad base of demand, including
corporate rooms associated with entertainment and traditional
industries, leisure demand drawn to the county’s beaches and other
world-renowned tourism destinations, and a large base of corporate
and social group demand.
The Los Angeles lodging market has historically outpaced the national
average in RevPAR growth, particularly following downturns. Between
1993 and 2000, Los Angeles RevPAR grew at a compound annual
growth rate of 7.8%, compared to the national average of 4.8% during
the same period. Following the recession in the early 2000s, Los
Angeles RevPAR grew by a compound annual growth rate of 10.6%
between 2003 and 2007, compared to the national average of 7.5%.
Similar to historic trends, Los Angeles RevPAR is once again growing
at above-average levels, with strong RevPAR growth beginning
in 2010. The Los Angeles market continued to improve in 2011 as
RevPAR increased 11.7%. Year-to-date through October 2012,
RevPAR increased 10.6%, driven by a 5.4% increase in ADR and a
4.9% increase in occupancy.2
The below chart demonstrates that Los Angeles ranks as one of the
top ten markets for average daily rate.
ADR comparison across major U.S. markets: year-to-date
October 2012
New York, NY
Oahu Island, HI
San Francisco/San Mateo, CA
Miami-Hialeah, FL
Boston, MA
Washington, DC-MD-VA
New Orleans, LA
San Diego, CA
Los Angeles-Long Beach, CA
Chicago, IL
Seattle, WA
Anaheim-Santa Ana, CA
Philadelphia, PA-NJ
Phoenix, AZ
Total U.S.
Tampa-St Petersburg, FL
Denver, CO
Minneapolis-St Paul, MN-WI
Nashville, TN
Orlando, FL
Houston, TX
Los Angeles historical lodging performance
Norfolk-Virginia Beach, VA
$140
90%
$120
$100
Detroit, MI
$0
$50
$100
$150
$200
$250
$300
Average Daily Rate
Source: Smith Travel Research
30%
20%
$20
10%
$0
0%
ADR
Source: Smith Travel Research
Smith Travel Research
Smith Travel Research
70%
40%
$40
2
Atlanta, GA
50%
$60
1
80%
60%
$80
Dallas, TX
St Louis, MO-IL
RevPAR
Occupancy
Strong occupancy and average rate growth driven by the area’s
transformational changes have allowed the Los Angeles market to
experience continued, above-market RevPAR gains, moving Los
Angeles from the tenth highest RevPAR market in the nation in 2000
to the eighth position in 2011 and year-to-date October 2012.
This sustained recovery of the Los Angeles lodging market is fueled
by the volume of overseas visitors, the city’s strong regional economy,
and continued development around the city, especially projects
associated with the revitalization of downtown Los Angeles.
2 Hotel Intelligence: Los Angeles | December 2012
Tourism breaks records and is on pace for continued growth
Los Angeles is one of the largest tourism markets in the U.S. and second
only to New York as the top-ranked destination for overseas visitors.
Los Angeles County overnight visitor volumes and expenditures
$18
30
$16
$14
$12
20
$10
15
$8
10
$6
Direct Spending ($B)
Overnight Visitors (Millions)
25
$4
5
$2
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
F
01
20
20
20
19
00
$0
99
0
Overnight Visitation
Direct Spending
Source: Bureau of Economic Analysis: CIC Research and Tourism Economics
In 2011, tourism in Los Angeles broke through previous peak levels
and experienced the highest number of visitors and spending in the
history of the city with overnight visitation of 26.9 million and visitor
spending of $15.2 billion, representing year-over-year increases of
3.3% and 6.4%, respectively.
Increases in overnight visitation were driven by strong growth in
international travel which traditionally generates higher spending per
traveler. For example, in 2011, international tourists represented 22%
of overnight visitors, but accounted for 35% of total visitor spend.
Economic fundamentals remain strong
The Los Angeles MSA alone is ranked as the world’s twelfth largest
economy, powered by international trade, manufacturing, tourism,
entertainment, technology, and professional services.3 Los Angeles
County possesses a diverse economic base, with many “new
Fueling the growth in international travel are increases from populous
emerging markets which represent large future growth potential. For
the first time ever, in 2011, China was ranked in the top five markets for
international visitor generation, boasting 24% growth in visitation over
2010, while visitation from Brazil increased by 75% in 2011. While still
relatively small feeder markets, China and Brazil are the first and fifth
largest countries by population and represent remarkable growth potential.
Overnight visitation is projected to increase approximately by 3% to
a new record of 27.8 million visitors, while direct visitor spending is
projected to increase by 5% to a new record of $15.4 billion in 2012.
As a result of the favorable trends in travel to Los Angeles, CIC Research
forecasts that overnight visitation to Southern California will increase
by an additional 1% to 2% in 2013, driving increases in visitor
spending of 4% to 5%.
Recent and ongoing openings and expansions of area museums
and leisure attractions such as the renovation and expansion of the
Los Angeles County Museum of Art, the $130 million Broad museum
development in downtown Los Angeles, the new Space Shuttle
Endeavor exhibit at the California Science Center, the proposed
Farmers Field, and continued investment in the area’s famous theme
parks will continue to draw new visitors.
Additionally, large infrastructure investments such as the new
$1.5 billion Tom Bradley International Terminal, $2.4 billion in port
modernization projects, and significant light rail expansions will help
the area accommodate this new demand and decrease congestion.
economy” businesses such as bio-medical, digital information
technology, and environmental technology.
Gross metro product growth is expected to accelerate in 2012,
forecasted at 2.1%. Additionally, the unemployment rate decreased in
2011 to 11.4% and is forecasted to decrease again in 2012 to 10.5%.
Economic fundamentals of Los Angeles MSA
Indicator
2008
2009
2010
2011
2012E
2013F
2014F
2015F
Gross metro product ($B)
685.6
653.7
663.4
675.9
689.9
702.0
720.7
745.3
% change
Unemployment rate (%)
Population (000)
Personal income (% change)
Source: IHS Global Insight
3
World Bank
-0.6
-4.6
1.5
1.9
2.1
1.8
2.7
3.4
6.9
10.9
11.8
11.4
10.5
10.1
9.6
8.7
12,704.2
12,783.0
12,863.0
12,956.9
13,053.1
13,144.9
13,235.2
13,318.4
3.5
-5.6
3.7
5.1
2.8
4.1
4.7
4.8
December 2012 | Hotel Intelligence: Los Angeles 3
Los Angeles hotel transactions remain strong in 2012
Los Angeles is one of the largest and most active hotel transactions
markets in the U.S., peaking in 2005 at a volume of $1.1 billion –
representing 5% of the total national transaction levels.
Transaction volume in Los Angeles County is expected to total
$400 million in 2012, down from $570 million in 2011; however, average
price per key increased by 10% in 2012.
Volume
2013F
$0
2012E
Rooms sold
1,000
2011
$200
2010
2,000
2009
$400
2008
3,000
2007
$600
2006
4,000
2005
$800
2004
5,000
2003
$1,000
2002
6,000
2001
$1,200
2000
Transaction volume ($M)
Los Angeles County hotel transaction volume 2000 – 2013F
0
Rooms
Note: Hotel transactions $5M+; excludes hotels that sold as part of multi-state portfolios above $500M.
Source: Jones Lang LaSalle Hotels
While the number of transactions remained steady from 2011 to
2012, the total dollar volume was greater in 2011 due to a number of
large transactions. Notable sales in 2011 included the Mondrian Los
Angeles, which sold for $137 million, the Westin Pasadena, which sold
for $92 million, and the Sheraton Universal Hotel Los Angeles4, which
sold for $90 million.
Notable sales in 2012 include the Renaissance Hollywood5, which sold
for $169 million, and the W Hotel Los Angeles Westwood, which sold
for $125 million. The Renaissance Hollywood transaction represents
the largest single-asset transaction in the Los Angeles area since 2008.
The W Los Angeles Westwood transaction is also notable as it was
purchased by Pebblebrook Lodging Trust, and illustrates the continued
demand for high-quality, Los Angeles assets by hospitality REITs.
In addition to the transactions noted below, LaSalle Hotel Properties
invested $67.4 million in July 2012 to acquire the performing mezzanine
loan secured by the equity interests in the entities that own Shutters on the
Beach and Hotel Casa Del Mar in Santa Monica. This equates to implied
value of over $1 million per key for the combined properties.
During 2012, hospitality REIT share prices have increased 11%
on average since the beginning of the year. As illustrated earlier,
Pebblebrook Lodging Trust’s acquisition of the W Los Angeles
Westwood, along with the three Los Angeles-area hotels that were
purchased by REITs in 2011, indicate REITs’ desire to acquire highquality assets in the Los Angeles market.
Based on strong fundamentals and continued investor interest,
transaction volume is expected to range from $400 to $450 million
in 2013.
Notable Los Angeles County hotel transactions 2012
Date of sale
Property name
Price
Room count
Price per room
City
June 2012
Renaissance Hollywood*
$169,000,000
632
$267,405
Hollywood
W Hotel Los Angeles Westwood
$125,000,000
258
$484,496
Los Angeles
Embassy Suites Valencia*
$19,625,000
156
$125,801
Valencia
Hilton Garden Inn Valencia Six Flags
Undisclosed
152
Undisclosed
Valencia
Maison 140 Beverly Hills
Undisclosed
43
Undisclosed
Beverly Hills
The Belamar Hotel Manhattan Beach
Undisclosed
127
Undisclosed
Manhattan Beach
August 2012
May 2012
August 2012
July 2012
March 2012
*Seller advised by Jones Lang LaSalle Hotels
Source: Jones Lang LaSalle Hotels
4
5
Seller advised by Jones Lang LaSalle Hotels
Seller advised by Jones Lang LaSalle Hotels
4 Hotel Intelligence: Los Angeles | December 2012
Hospitality REIT share prices
REIT name
Ticker
1/1/2012
12/6/2012
Percent change
CHATHAM LODGING TRUST
CLDT
$10.78
$14.58
35.3%
CHESAPEAKE LODGING TRUST
CHSP
$15.46
$18.95
22.6%
DIAMONDROCK HOSPITALITY
DRH
$9.64
$8.77
-9.0%
FELCOR LODGING TRUST
FCH
$3.05
$4.17
36.7%
HERSHA HOSPITALITY TRUST
HT
$4.88
$4.82
-1.2%
HOST HOTELS & RESORTS
HST
$14.77
$14.84
0.5%
LASALLE HOTEL PROPERTIES
LHO
$24.21
$24.36
0.6%
PEBBLEBROOK HOTEL TRUST
PEB
$19.18
$21.38
11.5%
RLJ LODGING TRUST
RLJ
$16.83
$18.91
12.4%
STRATEGIC HOTELS
BEE
$5.37
$6.18
15.1%
SUNSTONE HOTEL INVESTORS
SHO
$8.15
$10.41
27.7%
Source: Bloomberg
Downtown transformation induces further demand
Over the past decade, downtown Los Angeles has experienced an
evolution in commercial and residential developments, leading to
additional sources of demand. With 48,000 residents, over 500,000
weekday employees, and more than 10 million annual non-local
visitors, Downtown has continued to evolve as a diversified urban
submarket. From the openings of LA Live in 2008 and the Ritz-Carlton
and JW Marriott in 2010 to the proposed Farmers Field football
stadium projected to be completed by 2017, downtown Los Angeles
continues to emerge as one of Southern California’s economic magnets.
The influx of a young and well-educated residential base is serving
as a catalyst to the gentrification of downtown Los Angeles. With
nearly 30,000 existing residential units as of the second quarter 2012,
Downtown’s current base of residents represents an 11% increase
over 2010. Upon the completion of the 1,400 residential units under
construction, population is expected to reach nearly 51,000.
Following the influx of residents, new restaurants and retail
shops have recently opened, increasing the attractiveness of the
neighborhood. As a result, residential rents in downtown Los Angeles
have continuously been on the rise with an average rental rate of
$2.49 per square foot (PSF) as of the second quarter 2012.6
Downtown Los Angeles notable office leases through third quarter 2012
Building
Address
Tenant
Square feet
Building class
333 South Grand Avenue
Wells Fargo Bank
291,000
A
Figueroa Plaza - Phase II
221 North Figueroa Street
Lewis Brisbois Bisgaard & Smith LLP
160,415
A
Figueroa at Wilshire
601 South Figueroa Street
PricewaterhouseCoopers
132,000
A
Wells Fargo Center
Bank of America Plaza
Ernst & Young Plaza
Aon Center
Bank of America Plaza
Figueroa at Wilshire
Mellon Bank Center
KPMG Tower
333 South Hope Street
Kirkland Ellis
101,412
A
725 South Figueroa Street
The United States Secret Service
94,100
A
707 Wilshire Boulevard
Morrison Foerster
70,300
A
333 South Hope Street
Alston & Bird LLP
80,671
A
601 South Figueroa Street
Cushman & Wakefield
60,958
A
400 South Hope Street
BNY Mellon Bank
54,411
A
355 South Grand Avenue
Richards Watson & Gershon
44,630
A
Source: Jones Lang LaSalle and Downtown Center Business Improvement District
6
Downtown Center Business Improvement District
December 2012 | Hotel Intelligence: Los Angeles 5
Downtown Los Angeles notable office transactions through third quarter 2012
Building
Address
Tenant
Square feet
Building class
Price
Price per SF
Mellon Bank Center
400 South Hope Street
CBRE Global Investors
701,535
A
$238,000,000
$339
The Wedbush Center
1000 Wilshire Boulevard
Lincoln Property Company
476,450
A
$132,000,000
$277
Pac Mutual Building
419-433 South Spring Street
523 West 6th Street
Mount Kellett Capital
424,598
A
$60,000,000
$141
419-433 South Spring Street
The Capital Foresight LP
513,906
B
$21,500,000
$42
811 West 7th Street
Sorgente Group
107,015
B
$28,500,000
$266
Fine Arts Building
Source: Jones Lang LaSalle and Downtown Center Business Improvement District
Commercial demand is drawn to Downtown given its substantial
concentration of office space, housing a variety of industry sectors
including entertainment, financial services, government, legal, and
technology, among others. Downtown Los Angeles comprises nearly
30 million square feet of office space, over 21 million square feet of
which are Class A, commanding an average rental rate of $36 PSF
compared to the city’s overall average of $31 PSF.
As of the third quarter 2012, downtown Los Angeles recorded an
18% total vacancy with no new construction in the current pipeline.
The tables shown on the previous page and above detail the major
recent leasing and sale transactions in downtown Los Angeles.7
Strong fundamentals spur continuous renovations and new supply
In 2010 and 2011, Los Angeles experienced hotel room supply
increases of 2.2% and 0.2%, respectively. With new hotel openings
being offset by hotel closures, Los Angeles hotel room supply
declined 0.8% year-to-date through October 2012.
Boutique hotels have opened up to fill the niche markets throughout
Los Angeles. Three boutique hotels totaling 308 rooms opened in
2011, along with one 32-room hotel opening in 2012. Offsetting these
supply increases, the 896-room Wilshire Grand Hotel and five other
independent hotels totaling 172 rooms closed in 2011, while two hotels
totaling 508 rooms closed in 2012.
The supply additions in the recent cycle and continuously improving
lodging fundamentals have spurred several notable renovations and
development projects as owners keep pace with newer properties
and attempt to capitalize on rising fundamentals.
Notable renovations/redevelopments in Los Angeles lodging market
Hotel
Key count
Project completion date
Omni Los Angeles
453
Apr-11
Notes
Downtown Los Angeles
Westin Bonaventure
1354
Oct-11
Luxe City Center Hotel
180
Jun-12
Doubletree Los Angeles Downtown
434
Jul-12
Conversion from the former Kyoto Grand Hotel
The LA Hotel Downtown
469
Spring-13*
Conversion from the former Marriott Downtown Los Angeles
Millennium Biltmore Hotel Los Angeles
683
TBD
The Line Los Angeles
388
Summer-13*
Reposition from the former Wilshire Hotel
Mixed-Use Redevelopment
900
Jan-17*
Conversion from the former Wilshire Grand Hotel
138
Jun-11
Conversion from the former Tower Beverly Hills
Hollywood, West Los Angeles, and Santa Monica
Mr. C Hotel
Hotel Bel-Air
103
Oct-11
Hyatt Regency Century Plaza
726
Jan-12
Meeting space renovation
Hilton Garden Inn Los Angeles/Hollywood
160
Mar-12
Conversion from the former Hollywood Heights Hotel
Sheraton Delfina
310
Jun-12
Beverly Hills Hotel
208
2015*
*Denotes anticipated project completion date
Source: Jones Lang LaSalle Hotels
Jones Lang LaSalle
7
First phase of renovation (new lobby) completed in August 2012
6 Hotel Intelligence: Los Angeles | December 2012
Los Angeles historical change in supply and demand
10%
8%
completed a multi-million dollar renovation, upgrading all aspects of
the property. Additionally, in July 2012, the former Kyoto Grand Hotel
reemerged as the 434-room Doubletree Hotel in the Little Tokyo district.
Following the closure of the 896-room Wilshire Grand Hotel in
December 2011, de-construction of the building began in late October
2012 as part of a $1 billion redevelopment project. Current ownership
plans to complete the project by January 2017; the redevelopment will
include a four-star hotel with 900 rooms, 400,000 square feet of Class
A office space, a five-level conference facility, and 45,000 square feet
of new restaurant and retail space.
6%
4%
2%
0%
-2%
-4%
-6%
-8%
-10%
Supply
Demand
Source: Smith Travel Research
Downtown Los Angeles hotel happenings
In 2011, the 453-room Omni Los Angeles Hotel emerged from a
$15 million renovation and the 1,354-room Westin Bonaventure
announced the completion of its $35 million transformation. In June
2012, the 180-room Luxe City Center Hotel, formerly the Holiday Inn,
The 469-room LA Hotel Downtown, formerly the Marriott Downtown
Los Angeles, is currently undergoing a $20 million renovation. Upon
the project’s completion in spring 2013, the hotel will be branded as
the Hyatt Regency Los Angeles Downtown. Also in the downtown
core, the 683-room Millennium Biltmore Hotel Los Angeles is
undergoing a multi-phase renovation.
Just west of downtown, the Sydell Group announced its plan to
reposition the former 388-room Wilshire Hotel in Koreatown as
The Line Los Angeles; the hotel, which will receive a comprehensive
rooms and public space renovation, will offer seven distinct food and
beverage venues and is scheduled for a summer 2013 opening.
Infrastructure investment increases growth capacity
Large scale infrastructure investments throughout Los Angeles
continue to boost the city’s ability to accommodate new demand and
decrease congestion. These improvements include rail, airport, port,
sport and entertainment, and retail.
Airport: With over $4.1 billion in completed or on-going projects, LAX
is currently undergoing the largest public works project in Los Angeles
City history. The centerpiece of the LAX modernization will be the
new $1.5 billion Tom Bradley International Terminal, with an anticipated
project completion by year-end 2013. Completion of the new terminal
will create capacity to simultaneously handle 18 new-generation jumbo
jets, significantly increasing LAX’s ability to accommodate an expected
surge in international travel to the Southern California region.
Sport and entertainment: Downtown Los Angeles will soon be home
to Farmers Field, a new NFL stadium, scheduled for completion in fall
2017. The 78,000-seat, 1.7 million-square-foot stadium will be located
on the current site of the Los Angeles Convention Center (LACC)
West Hall. Current plans also contemplate a $315 million expansion
of the LACC, making it one of the five largest convention centers in
the country, as well as generating 80 annual event days and injecting
$378 million into the Los Angeles economy.
Port: Los Angeles is home to the two busiest container ports in
the United States, the Port of Los Angeles and the Port of Long
Beach, which account for more than 40% of all container volume
coming into the United States and represent the most important
trade gateway to Asia. In 2011, the Port of Long Beach began a $1.2
billion modernization, and in 2013, the Port of Los Angeles will begin
a separate $1.2 billion capital improvement program. Together, the
$2.4 billion in infrastructure investment will ensure that Los Angeles
remains competitive as a top trade destination.
Retail: Several new retail developments are underway to
accommodate new demand. Following a $40 million renovation, the
prominent FIGat7th retail center reopened in October 2012. Additional
mixed-use developments in the Downtown pipeline include the
Metropolis, Blossom Plaza, One Santa Fe, and the Grand, among
others.
Rail: In 2012, the $930 million Phase 1 corridor of the Metro Expo
Line began service, connecting the Westside by rail to various
locations throughout the greater Los Angeles area. Furthermore,
Phase 2 development is currently being extended to Santa Monica
and is scheduled to open in 2015.
December 2012 | Hotel Intelligence: Los Angeles 7
Anticipated lodging supply additions
Hotel
Anticipated opening
Key count
City
2013
159
Long Beach
Under Construction
Courtyard by Marriott Long Beach
Ace Hotel
2013
180
Los Angeles
Residence Inn LA Live
2014
218
Los Angeles
Courtyard by Marriott LA Live
2014
174
Los Angeles
2013
172
Redondo Beach
Hotel Clark
2013
347
Los Angeles
Hampton Inn & Suites Santa Monica
2014
136
Santa Monica
Country Inn & Suites Lancaster
2014
88
Lancaster
Hilton Garden Inn
2014
147
Redondo Beach
Hampton Inn & Suites Montebello
2014
160
Montebello
Courtyard by Marriott Marina del Rey
2014
288
Marina del Rey
Crowne Plaza San Gabriel
2014
200
San Gabriel
Courtyard by Marriott Glendale
2014
174
Glendale
Dream Hotel
2014
148
Hollywood
Residence Inn Pasadena
2015
144
Pasadena
Final Planning
Residence Inn Redondo Beach
Source: Jones Lang LaSalle Hotels and Los Angeles Tourism & Convention Board 2012 Marketing and Planning Resource
Construction continues on a number of projects announced in
the downtown area which aim to capitalize on the market’s recent
improvements. The 392-room, $172 million, Courtyard and Residence
Inn by Marriott project across from LA Live broke ground in June 2012
and is scheduled for completion in 2014.
The Hyatt Regency Century Plaza also completed a meeting space
renovation in January 2012. Redevelopment plans for the property
have been recently announced which would reduce the hotel room
count from 726 to 394 and would introduce 353 condominium units;
the project is expected to break ground in 2014.
Just a few blocks away, Greenfield Partners is converting the former
United Artists Theater to a 180-room Ace Hotel; the hotel is projected
to open in 2013. Redevelopment projects at the Hotel Clark, Trinity
Auditorium, and at 1130 Hope Street have also been proposed and
could contribute additional boutique supply to the market.
The iconic 208-room Beverly Hills Hotel announced a comprehensive,
multi-phase renovation, scheduled for completion in the fourth quarter
2014; the property unveiled the first phase of the renovation in June
2012, with a new lobby.
Hollywood, West Los Angeles, and Santa Monica hotel happenings
In June 2011, the former Tower Beverly Hills was converted to the
luxury boutique 138-room Mr. C Hotel. In October 2011, the 103-room
Hotel Bel-Air reopened after a two-year, $100 million renovation,
debuting the new Wolfgang Puck at Hotel Bel-Air Restaurant and
the La Prairie Spa. In March 2012, RLJ Lodging Trust reopened the
former Hollywood Heights Hotel as the 160-room Hilton Garden Inn
Los Angeles/Hollywood.
In Santa Monica, the much-anticipated Shore Hotel opened its doors
in October 2011; the property features 164 guestrooms, the Blue
Plate Taco Restaurant, and is the first LEED® Gold Certified hotel in
Santa Monica. Furthermore, in June 2012, the 310-room Sheraton
Delfina completed an $8.8 million renovation addressing the lobby,
guestrooms, corridors, meeting space, and public spaces.
As improving fundamentals fuel continued demand growth, Los
Angeles lodging supply is expected to grow conservatively in the
next four years, achieving a projected 0.8% CAGR between 2011 and
2016. Currently, four hotels totaling 731 rooms are under construction,
and 11 projects totaling 2,004 rooms are in the final planning phase.
8 Hotel Intelligence: Los Angeles | December 2012
As lodging performance continues to improve, these additions will
be spread across various submarkets including Downtown, Long
Beach, Los Angeles Airport, Los Angeles East and Southeast, and
Pasadena/Glendale/Burbank, among others. The above table details
these potential developments with anticipated openings between 2013
and 2015.
Los Angeles lodging market outlook
Despite continued macroeconomic volatility, Los Angeles-area
economic indicators continue to improve and lodging fundamentals
remain very strong. Furthermore, substantial infrastructure projects
currently underway and in planning have attracted people back into
urban locations and ignited infill development which will drive future
growth, especially in downtown Los Angeles.
As a result, savvy owners throughout the area have continued
to invest in their hotel properties to capitalize on the strong and
improving operating environment. The increasing quality of area
hotels, limited supply available for acquisitions, and excellent lodging
market outlook in the Los Angeles area have combined to create a
seller’s market for high-quality, well-located assets which should help
drive values as confidence increasingly returns to the marketplace.
Jones Lang LaSalle Hotels’ dedicated
Atlanta
tel+1 404 995 2100
fax: +1 404 995 2109
Dallas
tel: +1 214 438 6100
fax: +1 214 438 6101
Leeds
tel: +44 113 244 6440
fax: +44 113 245 4664
Miami
tel: +1 305 529 6345
fax: +1 305 529 6398
San Francisco
tel: +1 415 395 4900
fax: +1 415 955 1150
Auckland
tel: +64 9 366 1666
fax: +64 9 358 5088
Denver
tel: 303 260 6500
fax: 303 260 6501
London
tel: +44 20 7493 6040
fax: +44 20 7399 5694
Milan
tel: +39 2 8586 8672
fax +39 2 8586 8670
São Paulo
tel: +55 11 3071 0747
fax: +55 11 3071 4766
Bangkok
tel: +66 2624 6400
fax: +66 2679 6519
Dubai
tel: + 971 4 426 6999
fax: +971 4 365 3260
Los Angeles
tel: +1 213 239 6000
fax: +1 213 239 6100
Moscow
tel: +7 495 737 8000
fax: +7 495 737 8011
Shanghai
tel: +86 21 6393 3333
fax: +86 21 6133 5612
Barcelona
tel: +34 93 318 5353
fax: +34 93 301 2999
Düsseldorf
tel: +49 211 13006 0
fax: +49 211 13399 0
Lyon
tel: +33 4 7889 2626
fax: +33 4 7889 0476
Munich
tel: +49 89 2900 8882
fax: +49 89 2900 8888
Singapore
tel: +65 6536 0606
fax: +65 6533 2107
Beijing
tel: +86 10 5922 1300
fax: +86 10 5922 1346
Exeter
tel: +44 1392 423696
fax: +44 1392 423698
Madrid
tel: +34 91 789 1100
fax: +34 91 789 1200
New Delhi
tel: +91 124 331 9600
fax: +91 124 460 5001
Sydney
tel: +61 2 9220 8777
fax: +61 2 9220 8765
Birmingham
tel: +44 121 643 6440
fax: +44 121 634 6510
Frankfurt
tel: +49 69 2003 0
fax: +49 69 2003 1040
Manchester
tel: +44 161 828 6440
fax: +44 161 828 6490
New York
tel: +1 212 812 5700
fax: + 1 212 421 5640
Tokyo
tel: +81 3 5501 9240
fax: +81 3 5501 9211
Brisbane
tel: +61 7 3231 1400
fax: +61 7 3231 1411
Glasgow
tel: +44 141 248 6040
fax: +44 141 221 9032
Marseille
tel: +33 495 091313
fax: +33 495 091300
Paris
tel: +33 1 4055 1718
fax: +33 1 4055 1868
Washington, D.C.
tel: +1 202 719 5000
fax: +1 202 719 5001
Buenos Aires
tel: +54 11 4893 2600
fax: +54 11 4893 2080
Istanbul
tel: +90 212 350 0800
fax: +90 212 350 0806
Melbourne
tel: +61 3 9672 6666
fax: +61 3 9600 1715
Perth
tel: +61 8 9322 5111
fax: +61 8 9481 0107
Chicago
tel: +1 312 782 5800
fax: +1 312 782 4339
Jakarta
tel: +62 21 515 5665
fax: +62 21 515 5666
Mexico City
tel: +52 55 5980 8054
fax: +52 55 5202 4377
Rome
tel: +39 6 4200 6771
fax: +39 6 4200 6720
COPYRIGHT © Jones Lang LaSalle IP, INC. 2012
All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of Jones Lang LaSalle. It is based on material that we believe to be reliable. Whilst
every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors. We would like to be told of any such errors in order to correct them.