CoStar
09/03/19

Onni Group Proposes One of Los Angeles Area’s Largest Hotels
Developer Seeks Approval for Over 850 Rooms in Glendale, California
By Karen Jordan

https://product.costar.com/home/news/813587664

Developer Onni Group has proposed a more than 850-room hotel in Glendale, California, which could become one of the largest hotels by room count in greater Los Angeles.

The proposed hotel, at 611 N. Brand Blvd. in downtown Glendale, consists of a 32-story tower and a 28-story tower built on a shared podium with underground and above ground parking, according to city documents. Potential plans include 6,400 square feet of commercial space, according to Mark Berry, principal development officer at the City of Glendale. That could include shops and restaurants, as well as a swimming pool.

Onni Group has submitted its plans in the first of a two-step design review process, the preliminary stages of entitlement, but the Glendale City Council will make the final decision on the project, according to Berry.

The project would be the largest hotel by room count in the Los Angeles County region known as the Tri-Cities area, which includes Burbank, Glendale and Pasadena, according to hotel brokerage and research firm Atlas Hospitality Group. It would also be among some of the largest hotels in the greater Los Angeles area, which is led by the Westin Bonaventure in downtown Los Angeles with 1,358 rooms. The project would be in a similar room range to the Intercontinental in downtown Los Angeles, which has around 890 rooms.

“The selling point for Glendale is, generally, its location because it’s kind of in the center of L.A. County, but it’s more of a local business and residential community than a real tourist destination,” said Steve Basham, a managing analyst tracking Southern California with CoStar Market Analytics.

Basham said the hotel largely is poised to cater more toward business travelers. The area is home to a dense concentration of businesses attracted to the area’s competitive office rental rates and economic policies. Glendale has no gross receipts or business license taxes, which help position it as a more pro-business environment than many other cities in the Los Angeles area, according to CoStar Market Analytics.

Bob Sonnenblick, chairman at commercial real estate firm Sonnenblick Development, said that hotel developers could be facing a slowdown in the hotel industry, which just finished its 10th straight year of growth and could begin to cool in coming years.

The number of hotel property sales in California rose 8% in the first half of this year from the same time last year when 145 properties changed hands, according to Atlas Hospitality Group, which tracks California hotel sales and development. However, industry executives agree the trend could reverse if demand slows in an economic downturn.

Onni Group purchased the 396,000-square-foot office building currently located at the site in February 2017 for $83 million, according to CoStar data. Omni Group did not return requests for comment on the development.