Occupancy rates at Los Angeles hotels remain at half capacity, but one local developer is counting on a comeback no matter how long that may take.
Nela Development filed plans to build a 175-key hotel in Hollywood, one of the few firms to submit construction plans for a new hotel during the pandemic.
The proposed property at 6445 West Sunset Boulevard will be 173 feet tall and include a 12,500-square-foot restaurant and bar, records show. The filing was submitted this week to the City Planning Commission.
The Hollywood proposal comes as hotel construction has sharply dropped throughout Los Angeles and California amid the coronavirus outbreak. The number of hotels under construction statewide has plummeted 17 percent in the past year, according to a report last month from Atlas Hospitality Group.
It was a different story when Nela purchased the land in March 2019 for $7.5 million. Through the first half of 2019, 36 new hotels opened statewide and another 45 projects with 7,500 rooms were under construction, Atlas noted at the time. There were also 268 projects with 40,000 rooms in the planning stages.
The 9,545-square-foot property Nela bought is now home to a small strip mall, but the site is adjacent to studio and office space leased by Netflix and other content creators.
Nela CEO Marissa Solis and other company officials did not return calls for comment. The developer, with an office in Highland Park, says it has over three decades of experience.
Overall hotel occupancy in L.A. and nationwide only recently crept back up to 50 percent, but travel restrictions, sporadic surges in Covid cases and general consumer uncertainty has kept demand low. Combine that with banks increasingly reluctant to provide loans, and “the vast majority of hotels in planning will simply not get built,” Atlas Hospitality Group concluded in its recent report.
Some hotels that have finished construction but their owners have yet to open, Atlas noted, deciding that operating costs during a pandemic would far exceed revenue generated.
The post Occupancy optimism: Developer plans 175-room Hollywood hotel appeared first on The Real Deal Los Angeles.
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