An entity related to French luxury retailer and developer LVMH was the buyer of the former 80-room Luxe Hotel at 360 N. Rodeo Drive for an eye-popping $200 million, or about $2.5 million a room, according to public records and CoStar research.
The true buyer of the property and the price were not named when JLL issued a statement in December that the property had been sold. JLL represented the seller, Harkham Family Enterprises, a Los Angeles investment firm, in the deal. Newmark represented the buyer.
The manager of the buying entity, 360 N. Rodeo Drive LLC, is listed in public records under Dennis Ferrazzano, a partner at Chicago-based Barack Ferrazzano, the primary North American real estate counsel for LVMH.
Ferrazzano and an LVMH representative both declined to comment.
With the deal, the Louis Vuitton parent company is positioned as one of the largest hotel investors along the posh Rodeo Drive. Its first foray into the Rodeo Drive hospitality business came in April 2020, when it revealed it was redeveloping a former Brooks Brothers at 468 N. Rodeo Drive into a nine-story, 115-room Cheval Blanc hotel.
A building permit for the foundation for the Cheval Blanc hotel was sought around Dec. 14 with an estimated construction cost of $66 million, according to city of Beverly Hills records.
"This really speaks volumes to the value that high-end investors place on prime and world famous locations," said Alan Reay, president of Irvine-based hotel brokerage firm Atlas Hospitality Group. "They will benefit from economies of scale in having two hotels, and it will also add real value and exposure to the Louis Vuitton brand."
It's unclear what LVMH intends to do with the 360 N. Rodeo Drive property, which features retail space leased to Ferrari, Patek Philippe and Rolex. The Luxe Hotel there closed as international travel dried up during the pandemic.
LVMH's Cheval Blanc hospitality business operates hotels in Paris, the French Alps and on an island in the Indian Ocean near the Maldives.
The Hollywood-Beverly Hills hotel market still hasn't fully recovered from the pandemic and has an average occupancy of 58.6%, below the greater Los Angeles average of 66%, according to CoStar data. In February 2020, the market's occupancy was 81%.
The market's revenue per available room, a metric used to measure hotel performance, was $186.49, well above the greater L.A. average of $117.09, according to CoStar data.