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Breaking News in Beverly Hills, CA the L’Ermitage hotel is on the Market

Posted on Jan 8, 2010 by in Active Rain | 0 comments

Breaking news in Beverly Hills, CA the L’Ermitage hotel is on the market. I was reading in the Commercial Real Estate News syndicated by LoopNet that there are multiple offers on The Raffles-L’Ermitage Hotel.

 At first glance one would think, this is fantastic, on the other hand we need to look at the Real Story here. In the year 2000 the Beverly Hills property was acquired for $68 million

This was major news then, since the per-room price at the time was a record for a Los Angeles area hotel not being on the beach.

 Since then the property’s performance has slumped. The occupancy rate is down to about 65% and without saying so is the cash flow. That means based on sources reporting a  high bid of $40 million and a cash flow of $1 million translating to a  Capitalization Rate of 2.5% , which is  hard to believe, when full service luxury hotels in the area have been selling at a cap rate of 8%-9%.

 This is very telling.

 

If you are a consumer  who is considering buying  or selling  a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 (USA) or email me at homes@endrebarath.com  or visit one of my websites at http://www.endrebarath.com  Your Pet Friendly Realtor. I contribute a portion of My commission to Local Animal Rescue Organizations.  

                                                                                            

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