The Sheraton Gateway Hotel outside Los Angeles International Airport has been sold by Los Angeles real estate developer Kor Hotel Group to a Chicago-area investor for $97 million, a real estate brokerage said Thursday.
The recently renovated hotel with 802 guest rooms on West Century Boulevard has been acquired by Harp Group, according to brokerage Jones Lang LaSalle Hotels, which represented the seller.
"The LAX hotel market has performed extremely well in recent years with occupancies for the major hotels topping 80%," said John Strauss, an executive vice president at Jones Lang LaSalle. Room rates have been rising over the last five years.
It was the third-largest hotel sale in Los Angeles County this year. The Langham Huntington Hotel & Spa in Pasadena -- formerly a Ritz-Carlton -- sold for $165 million, and the Century Plaza Hotel in Century City was acquired for $366.5 million.
The Sheraton deal "further demonstrates strong investor appetite for high-quality hotel properties in the Greater Los Angeles area despite a more challenging debt environment and concerns about the overall economy," Strauss said.
Kor bought the Sheraton in 2002 for $44.5 million, said hotel consultant Alan Reay of Atlas Hospitality. Kor spent about $14 million on improvements that include a new lobby and a Don Shula steakhouse. The Sheraton was completed in 1981 and is considered a four-star hotel.
Oak Brook, Ill.-based Harp specializes in acquiring and developing hotels. It bought the Raddison Hotel at LAX last year for $93 million and also owns the Doubletree Hotel near LAX and the Ambassador East Hotel and Pump Room in Chicago. Harp is building the InterContinental Chicago O'Hare Hotel, which is scheduled to be completed this year.