Sheraton Universal Hotel is put on the market
The long-troubled Sheraton Universal Hotel is officially on the market now, real estate brokers said Wednesday.
The 20-story tower in Universal City is one of the best-known hostelries in Southern California, but it has been in financial trouble since the recession brought the hotel industry to its knees. Los Angeles-based real estate developer and landlord Lowe Enterprises paid $122 million for the 451-room hotel at the top of the market in 2007 and spent $25 million on improvements to the guest rooms and public spaces.
Hotel values started falling in 2008, however, and kept dropping. The Sheraton Universal was appraised at $75 million in February by independent data provider Trepp, said Bob Kaplan, senior managing director of PKF Capital.
With business and leisure travel depressed by the recession, the hotel was hit by falling occupancy, which drove down income. Lowe lost control of the property earlier this year.
The Sheraton Universal Hotel should appeal to investors because it is a large property in a central location where it would be very difficult to get a new competing hotel approved and built, said John Strauss, executive vice president of Jones Lang LaSalle Hotels, the brokerage marketing the property.
Jones Lang declined to state an asking price for the 41-year-old hotel, but current prices for similar properties would put its price at about $200,000 per room, or $90 million.
Sales of large Southern California hotels have been rare in recent months, but the few that have traded hands, such as the Los Angeles Marriott Downtown and Wyndam Orange County in Costa Mesa, were sold for about half their values at the peak of the market, Kaplan said.
New owners could continue to run the hotel as a Sheraton or rename it by bringing on another hotel operator, Jones Lang said.