Real Estate Industry News

Before the transformation of this circa-1927 apartment building, the Commodore of Hollywood was especially run-down — the manager’s office in the lobby resembled a jail cell, and the fire escapes overflowed with junk.

“It was fully occupied, but in particularly grim condition,” said Alan Nissel, principal of Wilshire Skyline, the Los Angeles-based property management and development firm that bought the building in 2010. “It was sorely in need of new safety measures and a design overhaul.”

Today the 73-unit Commodore, with rents up to $5,000, is one of a clutch of century-old Los Angeles buildings being overhauled and ushered into the current market. The rehabs help preserve historic properties but also generate controversy when they displace existing tenants and remove units from rent-control laws.

When the Commodore renovation team started gutting the interior of the Mediterranean Revival building, Nissel said they discovered “all sorts of interesting surprises.”

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“There was an elegant, dark-purple terrazzo tile in the lobby buried underneath four layers of flooring,” he said. “We had no idea about all the historical details hiding beneath the surface. It was a diamond in the rough.”

The approximately $10-million revamp, completed in May and overseen by KFA Architects and Studio Preveza, also revealed a portico in the Commodore’s front entrance, hidden beneath stucco, and two basement units that had been barricaded.

The local developers rehabilitating these venerable buildings are adamant about retaining the details that make the structures special. Post-makeover, they’re prime short-term residences — a demand fueled by millennials in creative fields, seeking homes linked to history but still offering collaborative work areas, concierges and pet runs.

“This is a building that has always housed creative people,” said Nissel — former residents include Robert Vaughn (“The Magnificent Seven” and “The Man from U.N.C.L.E.”) and Clara Blandick (Auntie Em in “The Wizard of Oz”). “The apartments were originally designed for successful actors who hadn’t bought the mansion in Beverly Hills yet, who were about to break into the ‘A list’ and who wanted to live among people like them.”

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The development isn’t the only newly revamped apartment building out to capture the seductive appeal of old Hollywood.

Villa Carlotta, in Hollywood’s Franklin Village neighborhood, was recently re-introduced to the market after a $5.5-million renovation wiped out pests, lead, asbestos and mold contamination that had dogged the once-luxurious building, designated a Los Angeles Historic Cultural Monument in 1986. When CGI Strategies, a boutique real-estate investment and strategy firm, bought the building in 2014, 30 of the 52 units were occupied.

Renters are allowed to be evicted from rent-controlled apartments under a state law called the Ellis Act, but only if the building is being torn down or removed from the rental market. In Los Angeles, tenants must be allowed to return at about the same rents if the units go up for lease again.

That happened at the Villa Carlotta after a plan to turn the building into a boutique hotel fell apart, but only one tenant opted to move back in. Other tenants had agreed to move after receiving relocation funds from CGI Strategies that exceeded what the developer was required to pay.

Since the beginning of 2001, nearly 26,000 units have been removed from the Los Angeles rental market under the Ellis Act, according to the Coalition for Economic Survival, a tenant advocacy group.

At the Villa Carlotta, — under the watch of the Los Angeles Office of Historic Resources and the Cultural Heritage Commission — CGI had artists hand-paint the stenciled wood beams and coffered ceilings, restore mahogany cabinets and wood floors, and repair marble statuary. New exterior awnings were created and installed by the same company that did them in 1926.

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“The previous owner hadn’t touched it since the 1950s,” said Gidi Cohen, CGI’s founder and CEO. “We had to get inside the walls to fix the plumbing and air conditioning, and renovate the exterior while leaving the structure intact. It was challenging.”

Cohen called the added costs “painful.”

“When it comes to historical properties you have to set the returns aside, otherwise you’re not staying true to the property,” he said.

“It would have been easy to create wallpaper that looked like the original stenciling and glue it on top. But that would have been faking it. Instead we hired an artist who lay on his back on top of scaffolding for a year. In the bathrooms, we could have bought new vintage-style pedestal sinks, or we could refurbish the original ones. We chose to do it the hard way.”

The building is now being marketed as a hotel-apartment hybrid offering a minimum 30-day stay, although Cohen said about 60% of tenants have signed year-long leases. The fully furnished units are sized from 650 to 1,000 square feet, with rents ranging from $4,500 to $8,000 a month.

“Our tenants are in music, Hollywood, fashion,” Cohen said. “They are a creative crowd. This generation wants flexibility and convenience. They move in with a suitcase, stay six months, and then move on.”

Joining the roster of revamped historical apartments will be the Morrison Hotel, a century-old downtown Los Angeles building with a familiar name and façade.

Currently under development by Relevant Group, once complete in 2022 the building will offer 450 hotel rooms and 135 apartments, with a plan to hew closely to the one-time edgy aesthetic of the building, which has been boarded up for 15 years. In 1970 it appeared on the cover of The Doors album of the same name.

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“It has to be something that celebrates the history of the building without being kitschy or Disneylandish,” said Simon Ha, partner at Steinberg Hart, the design firm on the project.

The three-phase plan, which involves adding to the footprint of the existing property, is awaiting a construction start date. But Ha estimates that phase one will be complete by the middle of 2021.

“The concept is to restore the building to its former glory, but the former glory wasn’t too extravagant,” he said. “It was a pretty modest building.

“The goal is to preserve as much as possible, including a large fireplace in the lobby,” Ha said. “We want it to feel like it was something that was built over time, like there’s an arc to it, and to build something unique to the neighborhood than what is already there.”