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11/17/17
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A 258k sf, 13-story office tower located at 5959 West Century Blvd, one block away from LAX International Airport, is going to be converted into a 129-key Hyatt House and a 272-key Hyatt Place Hotel adjacent to LAX. The project is being funded with $50 mil in construction financing arranged by George Smith Partners (GSP).
Planned for completion in 2019, the redeveloped Hyatt House and Hyatt Place Hotel will feature a mid-century inspired urban design, rooms with 11.5-foot ceiling heights, and a host of amenities including a rooftop bar, pool, and restaurant with unobstructed views spanning from Downtown Los Angeles to the Pacific Ocean, a variety of dining options and a state-of-the-art 24/7 fitness center.
The senior construction financing, on behalf of 5959 LLC, an affiliate of California Real Estate Regional Center LLC (“CaRE”), was arranged by GSP’s Zachary Streit. Sized to 50% of total project cost, the non-recourse, interest-only loan will float at a spread of 425 basis points over one-month LIBOR and carries two one-year extension options.
“There is growing demand in the LAX submarket, and the current hotel stock is largely outdated,” explained Streit. “As a result, this new dual-branded offering, which will feature a trendy, mid-century urban design, will be of immediate interest to business and leisure travelers.”
Streit notes that the timing is right for this redevelopment, citing a 2016 report from STR Global showing a 91.5% hotel occupancy rate and a 12.7% year-over-year increase in average daily rate.
“The dual-branded Hyatt Hotel is located in one of the strongest hotel markets in Los Angeles thanks to its proximity to LAX and central location to all major LA attractions. The city’s $14 bil LAX modernization, along with new public transportation, the under-construction $2.7 bil NFL Stadium, 2028 Olympics, proximity to Silicon Beach, and emergence as one of the great global cities will continue to stimulate market demand for years to come,” according to Steve Shpilsky, Principal of 5959 LLC and Co-Founder of CaRE. “The project successfully combines EB-5 mezzanine financing with developer equity and senior financing to complete the hotel, creating over 1,000 new jobs in Southern California.”
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