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Historic Biltmore Sold to Hong Kong Hotel Operator

Real estate: L.A. landmark and adjoining tower fetch an estimated $60 million, a fraction of what they sold for in '89.

June 11, 1996|JESUS SANCHEZ | TIMES STAFF WRITER

The Japanese owners of the stately Biltmore Hotel in downtown Los Angeles have sold the landmark property and an adjoining office tower to a Hong Kong-based hotelier for an estimated $60 million--a fraction of what they sold for in 1989.

The buyer is Regal Hotels International Holdings Ltd., whose chairman, Y.S. Lo, was in Los Angeles on Monday for a travel and tourism trade show. "I think it's an opportune time to enter the Los Angeles market," Lo said in a telephone interview. "I'm very confident in the prospects of the Los Angeles economy."

The sale reflects the steep decline in downtown Los Angeles real estate values since the late 1980s and the continued interest among Asian buyers outside Japan in bargain-priced properties in Southern California. Buyers from Taiwan and Indonesia, for example, have recently snapped up downtown commercial real estate.

Lo would not reveal the purchase price of the 687-room hotel and tower, but real estate brokers and hotel industry observers estimate they fetched only $60 million, or about a quarter the estimated $219 million a Japanese investment group--TAT Los Angeles Ltd.--paid for them seven years ago.

The hotel will be renamed the Regal Biltmore Hotel. Lo, whose company owns and manages more than 100 large hotels worldwide, said the Biltmore's current management will be retained. He also indicated that any current labor contracts--which have been a source of controversy in recent hotel acquisitions--will also be honored.

"Nothing will be changed with the staff," Lo said.

The Biltmore, which was built by a group of local businessmen in 1923 at a cost of $10 million, has a rich history. Besides serving as a rest stop for presidents from Franklin D. Roosevelt to Bill Clinton, it was the site of a 1927 banquet at which the Academy of Motion Picture Arts and Sciences was created and the design of the Oscar conceived.

The latest sale price is in line with other recent real estate sales in the downtown area, brokers said. Last year, the 1,368-room Bonaventure Hotel was sold for an estimated $50 million to Taiwanese investors.

The Biltmore has far fewer guest rooms than the Bonaventure, but the historic structure facing Pershing Square includes a 24-story office tower and an ornate, gilded interior that has been restored and would be hard to duplicate.

"The Biltmore is a wonderful grand dame of downtown Los Angeles," said Donald W. Wise, a broker and hotel specialist at CB Commercial. "The chairman [of Regal] likes properties exactly like the Biltmore--hotels that have [a sense of history] and a grand lobby."

Lo agreed, saying he prizes the 73-year-old hotel's design and ambience. He also said the Biltmore will benefit from Regal's ability to funnel its Asian and other customers to the hotel's doorstep.

"There will be a strong interest in a hotel like this," said Lo, whose company's Colorado-based Richfield Hospitality Services subsidiary manages 124 properties.

Downtown Los Angeles hotels have some of the highest vacancies and lowest room rates in the area, but the market has shown signs of improvement lately. During the first three months of this year, occupancy rates rose to nearly 60% from 49% during the same period of 1995, according to industry statistics.

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