SoCal Residence Inn Hotel Trades for $68M
By Nick Trombola March 25, 2024 1:26 pm
reprints
A hotel near the Los Angeles coast has traded hands in one of the few hospitality deals to close since the debut of the city’s “mansion tax.”
Washington Holdings has traded its 176-key Residence Inn by Marriott, in Manhattan Beach in Los Angeles’ South Bay, for $68 million to real estate investment company Land and Houses USA, L.A. Business Journal reported. Real estate service company JLL (JLL) represented Washington Holdings in the deal.
Built in 1985, the hotel is at 1700 Sepulveda Boulevard, about three miles south of Los Angeles International Airport and about one mile east of the Manhattan Beach coastline. Twenty Four Seven Hotels will manage the building.
“The addition of Residence Inn by Marriott Manhattan Beach to our portfolio continues the expansion of our management footprint throughout California, offering a model that’s flexible and fast on its feet with unparalleled area operational expertise,” Twenty Four Seven wrote in a LinkedIn post last week.
Representatives from Washington Holdings and Twenty Four Seven Hotels could not immediately be reached for comment.
Occupancy levels and average daily rates (ADRs) in Los Angeles, which indicate revenues for hotel rooms on a given day, are consistently some of the highest in the nation, according to a hospitality market report issued last year by Matthews. Tourism and leisure have driven that demand, fueled especially by the influx of travelers in the aftermath of the COVID-19 pandemic.
The 12-month occupancy rate for Los Angeles hotels had surpassed 70 percent late last year, one of the few U.S. markets to do so, yet were still below the nearly 80 percent levels seen before the pandemic began.
Yet hotel sales have plunged in the region lately, dropping over 90 percent since this time last year, according to CoStar. Much of that can likely be attributed to L.A.’s so-called “mansion tax,” enacted last spring, which significantly increased real estate transfer taxes for large deals.
Nick Trombola can be reached at NTrombola@commercialobserver.com.
Update: This story has been updated to reflect that due to the property’s location in Manhattan Beach, the Residence Inn transaction was not affected by L.A.’s “mansion tax.”
