Faring’s ‘Bond Hotel and Residences’ Is the Latest Project in WeHo’s Hotel Development Boom

The Bond Hotel and Residences, a project proposed by Faring for the north side Santa Monica Boulevard between Orange Grove Avenue and Ogden Drive, looks to be the next hotel in the pipeline for West Hollywood.

A recently released assessment of its possible environmental impact offers details of the project, which would include a six-story hotel with an apartment building and a restaurant and an art gallery. The site encompasses several lots bounded on the west by Orange Grove Avenue and on the east by Ogden Drive.

According to the environmental impact report (which can be downloaded online), the hotel, which would be on the lot now occupied by Brick Fitness, would have 86 rooms. A building fronting on Ogden Drive would have nine two-bedroom apartment units, 23 one-bedroom unit, and 38 studio units. Eleven of the 70 units would be affordable housing units. The Ogden lot currently is occupied by a two-story apartment building with seven rent-stabilized units. There would be two levels of underground parking accommodating 145 vehicles, with 45 spaces available to the general public. There would be 37 bicycle parking spaces.

The EIR says that construction of the project, which must receive approval from the city Planning and Urban Development Department, the Planning Commission and the City Council, could begin in Spring 2020 and end as early as Winter 2021. It notes the likely impact of construction and the project itself on neighboring homes and businesses and offers alternatives.

Faring, which is the company through which well-known local real estate developer Jason Illoulian operates, had contemplated building a hotel at the southwest intersection of Robertson and Beverly boulevards. Faring recently announced that it plans to use that site for a 10-story “cancer center.” Faring recently received the city Planning Commission’s endorsement of some changes proposed for its Robertson Lane project, which will include a nine-story hotel with 237 rooms on a site between Robertson Boulevard and La Peer Drive, just south of Santa Monica Boulevard. Other Faring projects include a building proposed for the site of the French Market at 7985 Santa Monica Blvd at Laurel with 83,000 square feet of retail and restaurant space. A four-story, 60-foot-tall office building will be constructed at the rear of the property.

The Bond Hotel and Residences is part of a major increase in hotel development in West Hollywood. That benefits the City of West Hollywood, where the hotel room tax (known in the industry as the transit occupancy tax or TOT) is a major source of revenue. With the opening of new hotels in recent years such as the “1” hotel on Sunset Boulevard in 2017 and the La Peer hotel in 2018, the city has become home to 20 hotels. The local hotel industry experienced a 15.1% increase in revenue last year, reaching a total of $219 million.

However, a study by STR, a company that analyzes tourism and hotel trends, showed the occupancy rate last year was 77.5%, a 6% decline from the 82.4% occupancy rate in 2017 and a decline of 10% from the 86.2% occupancy rate in 2016, which was the highest in the past six years.

The revenue per available room (RevPAR), another industry metric, was down 4.6% following a 5.6% decrease the year before. By contrast, RevPAR was up 10% in 2016 over the year before.

While the occupancy rate was down, demand was up overall, with an increase of 13.5% in 2018 over 2017. Demand for rooms had increased by 2% in 2017 over the year before.

The decline in the occupancy rate and revenue per room, along with the increase in the demand rate, suggests that the opening of new hotels in West Hollywood and surrounding areas such as Beverly Hills and Hollywood is having an impact on the existing hotels in WeHo.

That impact is likely to grow with the completion of the Marriott Edition, a 190-room hotel on Sunset Boulevard at Doheny. The Pendry, a project of AECOM Capital and Combined Properties Inc., is under construction on Sunset Boulevard at Olive Drive, the location of the former House of Blues. It will include 49 guest rooms and 40 condos. The Planning Commission has approved plans for a nine-story building on La Brea Avenue just south of Santa Monica Boulevard with 85 hotel rooms. And the Mani Brothers have proposed converting the Piazza del Sol on Sunset Boulevard into a 34-room hotel.  A group has proposed to convert the current site of Barney’s Beanery at 8447  Santa Monica Blvd. into an 88-room hotel along with 45 apartments.