Los Angeles Business Journal
09/26/18
DTLA Hotel Boom Continues
http://labusinessjournal.com/news/2018/sep/21/downtown-distinction-millennial-move-ins/
Westside-based commercial real estate lender Dominion Mortgage Corp. has provided an $11.6 million construction loan to develop a 64-room hotel branded by Hyatt Hotels Corp. at 1525 N. Cahuenga Blvd. in Hollywood.
The under-construction hotel, which is expected to be completed in November 2019, is slated to be part of the Unbound Collection by Hyatt brand. Hyatt has partnered with Hollywood-based hotel developer PNK Group Investments.
The project already had received some financing via a $6 million construction financing bond as well as overseas financing through the EB-5 program, which Congress established in 1990 to encourage foreign investment in the United States.
The $11.6 million loan is interest-only, where the borrower only pays interest on the loan for a fixed term. The loan’s initial term is two years but offers extensions.
“The loan was structured with a balloon payment, as the developer intends to sell the asset and thus, did not want to be locked into a hefty pre-payment penalty,” Keith Olson, partner at Dominion Mortgage, said in an email.
The Hyatt-affiliated hotel is part of a larger hotel construction boom in Los Angeles County.
Chicago-based developer Oxford Capital Group is building the seven-story, 220-room Godfrey Hotel one block south of the Hyatt project at 1400 N. Cahuenga Blvd.
Relevant Group, a Hollywood-based developer, is building Thompson Hotel, an 11-story building with 190 guest rooms at 1523 Wilcox Ave. Relevant also has broken ground on the Tommie Hotel, an eight-story, 212-room building at 6516 Selma Ave. in Hollywood.
PNK also is renovating 419 S. Spring St., a 13-story, 180-room, 122,000-square-foot building in downtown’s Historic Core neighborhood and turning it into a business hotel.
More than 4,300 new hotel rooms opened in Los Angeles County last year, the most of any market in California, according to Atlas Hospitality Group, an Irvine-based real estate advisory firm, in its California Hotel Development Survey for 2017.
Los Angeles County also finished last year with 33,500 new hotel rooms planned for development.
Downtown-based commercial real estate brokerage firm CBRE Group Inc. recently forecast that hotel rates in Los Angeles will continue to beat the national average despite the hotel construction boom.