CULVER CITY, CALIFORNIA Hersha Hospitality Trust is acquiring the 260-key Marriott Courtyard Westside in Culver City, the REIT’s first foray into the Los Angeles market.
The property will trade for US$47.5 million, or US$182,500 per key. The hotel was completely renovated and reopened as Courtyard Westside in 2008 and includes approximately 11,000 sq. ft. of meeting space.
“I am very excited about our entry into the Los Angeles market with an acquisition in a well-located, high barrier-to-entry infill market,” says CEO Jay Shah. “The Culver City submarket is an area that is home to a vibrant entertainment industry, a growing cultural district and a burgeoning employment center along with convenient transportation options. The competitive environment consists primarily of older product, and we believe the Courtyard Westside is one of the best hotels in its market due to its high quality and desirable location within five miles of the Los Angeles airport and Marina del Ray.
“The Los Angeles hotel market posted a strong year in 2010, and we expect it to be among the highest growth markets in the nation for the next several years. The expansion of Hersha’s footprint is another step in executing on our strategy of building a presence in a high-growth, high-density market.”
Courtyard Westside is surrounded by abundant commercial and leisure demand generators, including large concentrations of office space, high-end retailers, entertainment venues and production studios. It is proximate to Los Angeles International Airport, Venice Beach, Santa Monica Pier and Los Angeles Convention Center.
The hotel will be purchased with cash and borrowings drawn on the company’s line of credit. The total purchase price represents a first year economic capitalization rate of approximately 8.3% and an expected stabilized capitalization rate of approximately 11%.