Empty Hotels Get Second Life as Tiny Apartments During Pandemic
Developers are converting closed hotels and motels into housing, aiming to offer affordable units in hot markets with high...
March 7, 2023
Kairos Investment Management Co. (KIMC) has partnered with Harbor Associates to acquire a class A 12-story office and retail property with a five-story parking garage totaling more than 208,000 square feet in the Los Angeles submarket of Hollywood.
6922 Hollywood Boulevard fits with Kairos’ value-add strategy, as the headwinds from the pandemic have allowed the property to be acquired at distressed pricing, leaving the asset primed for capital and operational improvements, according to Carl Chang, CEO and founder of Kairos.
“This joint venture acquisition seeks to take a contrarian view of the current market conditions surrounding office,” said Chang. “The mixed-use asset offers multiple streams of revenue, which mitigates some of the risk around office in the near term, including 100 percent–leased retail, and rapidly improving parking revenue as traffic in this highly trafficked tourist destination has accelerated post-lockdowns. The diversification provides real opportunity to grow the asset’s value as really well-positioned properties recover in the future.”
As part of this strategy, Kairos plans to do site and facade improvements as well as update vacant office space, with a goal of reaching 85 percent to 90 percent occupancy by the end of 2025, noted Jonathan Needell, CIO at Kairos.
“Offices are still reeling from the headwinds created by the pandemic and accommodations being made for remote and hybrid work models,” said Needell. “Yet, Kairos has an appetite for these kinds of distressed opportunities during recessionary times no different than the GFC. With this Hollywood acquisition, we will continue to seek out similar opportunities that we believe might be well-positioned to benefit from the post-pandemic and post-recession recovery.”
* The information contained herein is for general, informational purposes only and is not intended to constitute an offer to sell or buy any securities or other assets or promise to undertake or solicit business, and may not be relied upon in connection with any offer or sale of securities or other assets.
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