Small Japanese Developer Identified as Buyer of Biltmore Place Complex

The mysterious buyer of the Biltmore hotel and office complex is Town Development, a small Japanese developer and owner of hotels, according to sources and a published report in Japan.

Biltmore Partners, a limited partnership, said Monday that it had agreed to sell Biltmore Place, as the complex is known, to a buyer known only as T.A.T. Los Angeles. The owner of the Delaware corporation, however, was not revealed.

Sources in the real estate community have said the buyer is Japanese and is paying about $219 million for the 66-year-old Biltmore Hotel and office building and an adjacent 24-story office tower that opened two years ago.

Sources confirmed Friday that Town Development of Tokyo is the sole owner of T.A.T. Los Angeles. It was originally thought that two Japanese companies owned T.A.T. Los Angeles. Town also was identified as the buyer in an article published Friday by the Japan Economic Journal. Town Development officials could not be reached for comment Friday.

Town Development owns 10 hotels in the United States and Canada, including small hotels in San Francisco and Monterey, said Michio Katsumata, West Coast correspondent of the Japan Economic Journal. Town’s other hotels are in Hawaii, Washington, Chicago and Toronto. The company has 75 employees.

Town Development manages the 4,000-room, 11-property Washington Hotel chain in Japan and recently spent $75 million to buy land in Hawaii near the huge planned community of Ewa City, which is starting to be developed. Town plans an 1,100-room resort on the site.

Katsumata said a Town Development executive told him the company believes that the price for the stately Biltmore Hotel and offices is a “bargain.” It represents the first prestige hotel the company has purchased.

Town Development has left management intact at each of its foreign hotels and intends to do the same at the Biltmore, sources said.

Biltmore Partners, which is primarily owned by the First Boston Corp. investment banking firm, bought the hotel with another company in late 1984 for $75 million but has since bought out the other company. The owners borrowed $162.5 million to renovate the hotel, convert one wing to 235,000 square feet of office space and build the 130,000-square-foot Biltmore Tower, but some sources have said the actual investment was closer to $200 million.

But First Boston reportedly is not losing money on the deal because of significant tax benefits from the once money-losing hotel and tax credits from renovating a historic property.

Aggressive marketing of the Biltmore in the two years since its renovation has turned the property into a money maker, hotel industry consultants have said.