Chesapeake Lodging Trust (NYSE:CHSP) announced last week that it has closed on the acquisition of the Ace Hotel Downtown and The Theater at Ace Hotel, located in Los Angeles, California for a purchase price of $103.0 million, or approximately $566,000 per key. The Trust entered into a new management agreement with Ace Hotel Group to continue to brand and operate the hotel.
“We are thrilled to announce our acquisition of the Ace Hotel and Theater and further expand our presence in the dynamic Los Angeles market,” commented James L. Francis, Chesapeake Lodging Trust’s President and Chief Executive Officer. “This historic building and theater was completely restored and was reopened early last year; the level of detail and immaculate condition of the facility is remarkable. We are very excited to add another first-class asset to our growing high-quality portfolio.”
After a nearly two year comprehensive renovation and restoration of the historic 1920’s building, the Ace Hotel Downtown Los Angeles opened to the public in January 2014. The property contains the 182-room hotel and the stunning and meticulously restored 1,600-seat theater, offering the most unique meeting, function and entertainment venue of any hotel in Los Angeles. “The theater booking pace is up considerably from its first year and will host over 100 events in 2015,” continued Mr. Francis. “We estimate that the theater alone will generate revenues in excess of $4.4 million and net operating profit of over $2 million.”
The historic 14-story Spanish Gothic property is located at South Broadway and 9th Street in the rapidly developing Broadway and Fashion corridor of Downtown Los Angeles. There are 15 Loft Suites which feature a private kitchenette and range from 479 to 703 square feet. The 633-square foot Ace Suite includes a living space, a private kitchenette, and a 494-square foot private terrace. Each well laid out room offers a unique design which maintains the exposed concrete ceiling, Homasote covered walls, minimalist furniture, antiqued brass fixtures and steel framed glass windows. Guestroom amenities include flat screen TVs, a Revo radio, HSIA, Rudy’s Toiletries, and Pearl+ soaps with acoustic guitars and turntables in select rooms.
The Ace Hotel features a popular and varied assortment of food and beverage outlets for guests and visitors to enjoy. Upstairs at Ace Hotel Downtown Los Angeles, a popular rooftop bar venue is seamlessly contained between the rooftop pool and an indoor and outdoor lounge area of nearly 2,000 square feet. With locally inspired décor and artwork, including the original salvaged theatrical lights, the space is incredibly attractive with outdoor landscaping and living walls.
Connected to the lobby is the hotel’s main three-meal restaurant, L.A. Chapter, which also has its own street front entrance and outdoor patio on Broadway. L.A. Chapter is a carefully cultivated brasserie with a focus on locally sourced vegetables and seafood. The 1,161-square foot space has a seating capacity of 121 and includes a full service bar. Adjacent to the lobby and L.A. Chapter is the Coffee Counter that serves Stumptown Coffee, delivering a high-end coffee and pastry experience.
Located above the lobby level and L.A. Chapter is the appropriately named The Mezzanine. With a variety of seating options, the 972-square foot space includes a cocktail bar and also serves as flexible meeting and private event space which can accommodate groups up to 85 people.
In addition to the theater, the hotel has 2,160 square feet of dedicated meeting and banquet space throughout three different meeting areas, including the 1,600-square foot Segovia Hall. All of the meeting spaces benefit from natural lighting and connecting doors, allowing for easy break-outs and flexibility for groups. There is also a fitness center providing guests with 24-hour access to a fully equipped facility with reclaimed hardwood floors from an old gymnasium. Behind the reception desk is an upscale gift shop selling stylish clothing and products featured in the guestrooms, as well as a photo booth for guests to document their stay.
Chesapeake Lodging Trust is a self-advised lodging real estate investment trust (REIT) focused on investments primarily in upper-upscale hotels in major business and convention markets and, on a selective basis, premium select-service hotels in urban settings or unique locations in the United States. The Trust owns 22 hotels with an aggregate of 6,691 rooms in nine states and the District of Columbia.
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