The Hotel Nikko at Beverly Hills, which for nine years provided luxury accommodations to a clientele composed mostly of Japanese travelers, is being bought by Le Meridien hotels as part of the international chain's U.S. expansion plans, company officials said Monday. Terms of the deal were not disclosed, but hotel industry observers say the transaction is in escrow for roughly $80 million.
The 300-room hotel, adjacent to the Beverly Hills city line at La Cienega Boulevard and Burton Way, is Le Meridien's first hotel in Los Angeles and its only property on the West Coast. Analysts say the four-star hotel will help raise Le Meridien's profile in the United States and draw international travelers familiar with the company's chain of hotels in 50 countries throughout the world.
A spokesman for previous owner Beverly Park Associates declined to comment, but industry experts say sale of the hotel reflects a current trend among Japanese companies to divest real estate holdings as part of efforts to restructure amid their country's worst recession since World War II.
Beverly Park bought the hotel for a reported $130 million near the end of the last real estate boom in 1991, said Alan Reya of Costa Mesa-based Atlas Hospitality Group, a consulting and brokerage firm.
Le Meridien currently manages hotels in New York, New Orleans, Dallas and Boston. The Los Angeles acquisition marks the company's first step in efforts to expand the chain to other major U.S. cities within the next three years, said Jacques Ligne, general manager for the new hotel. Targets include San Diego, San Francisco, Miami, Atlanta and Chicago,
Ligne said the hotel, just north of Beverly Hills' Restaurant Row, should appeal especially to Asian travelers already acquainted with Le Meridien's string of 15 hotels across the Far East. Hotel officials hope name recognition generated by expansion in the United States will encourage American travelers to book accommodations with Le Meridien abroad.
With its current popularity among leisure and business travelers, Los Angeles is key to that strategy, said Bruce Baltin of PKF Consulting in Los Angeles, which conducted an overview of the local hotel market for Le Meridien before the Nikko purchase. "Any international hotel chain frankly wants to have a hotel in Los Angeles because it's a gateway city," he said. Los Angeles County hotels are booked to nearly 75% capacity on an average night.
Although Beverly Park apparently took a loss on the sale of the property, Reya said the real estate market for luxury hotels across California has been hot, given the limited number of existing properties and few plans to build new hotels.
Le Meridien, which is owned by London-based Forte Hotels, Britain's largest hotel group, will spend at least $8 million in the next year on a cosmetic make-over to give the Japanese-themed hotel a more European flavor.