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Thursday, Mar 28, 2024

Sheraton Universal Sold for $120 Million

The 436-room Sheraton Universal Hotel has been sold to a Brentwood real estate investment and development firm for $122 million. Lowe Enterprises will buy the 20-story hotel from Walton Street Capital LLC and SCS Advisors, which paid around $50 million for the property just four years ago. That quick uptick in price is the result of increased attention on Universal City, where parent company NBC Universal plans to spend $3 billion over the next decade to expand the studio, theme park and office portion of the complex and add a residential element. Robert T. Patterson, president of the L.A. hotel consulting firm Paradigm Hospitality, said Lowe saw an opportunity and went for it. “They paid what they thought they needed to pay for it,” he said. And they may have overpaid Patterson questioned whether the hotel is worth $122 million, or almost $280,000 a room. “(The price) implies a room rate of $300 a night, and I doubt the property was achieving that much a night. It seems high,” he said. “But the buyer sees some upside potential and there’s a scarcity of property.” Lowe officials don’t argue that they wanted to get in on the action at Universal City early. “With NBC Universal announcing plans to expand its studio operations and build a new business campus, the hotel is uniquely positioned to benefit from future growth in the market,” said Bleecker Seaman, managing director of Lowe Enterprises Investors, in a statement. The company also plans to invest an additional $20 million to upgrade guest rooms, common areas and the hotel’s 40,000 square feet of meeting space. Plans also call for a new coffee shop in the lobby. Construction is scheduled to start this spring and finish by 2008. Sheraton will continue to manage the hotel. The last major renovation of the 8.5-acre property was in 1978. The hotel was developed in 1968 by Universal Studios to serve the hilltop park’s growing attendance. In June 2003, the theme park’s then-owner, Vivendi Universal, sold the hotel to a group led by Chicago-based Walton Street. An official with the investment company said the owner had no comment about the sale. It was their only property in the Valley.

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