But it was the quick success of the trendy Ace Hotel Los Angeles that opened in 2014 on a forlorn stretch of Broadway that galvanized investors. The theater and office complex-turned hotel built in 1927 by United Artists founders Mary Pickford, Douglas Fairbanks, Charlie Chaplin and D.W. Griffith drew a sophisticated crowd willing to spend lavishly on rooms, food and drinks.
The developers who bought the run-down building for $11 million in 2011 sold it as the Ace Hotel for $103 million in 2015 after spending an undisclosed amount on renovations. Its appeal as a lodging and entertainment destination for tourists and locals alike encouraged investment in the blocks nearby.
On Broadway near the Ace, the boutique Hoxton and Downtown L.A. Proper hotels are being created by separate developers in brick-clad towers dating to the 1920s.
Another boutique on the way is Hotel Figueroa near L.A. Live, set to reopen this month after a multimillion-dollar makeover meant to lift the 1920s-vintage inn from down-market to deluxe -- rooms are listed at more than $400 a night.
"An older building gives you a lot of cues and signals about what it wants to be," New York hotelier Andrew Zobler said. "It gives you a story."
Then it's up to the developer, architects and interior designers to tell a story that potential guests will buy into. Not just any old building will do.
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Zobler, founder of boutique hotel chain Sydell Group, had already renovated old structures into new hotels in New York, Miami and L.A.'s Koreatown when he and his partner Burkle began looking for properties in downtown Los Angeles a few years ago.
Burkle, who owns the biggest stake in the Los Angeles buildings Sydell Group operates as hotels, helped snatch up the vacant Commercial Exchange Building at 8th and Olive streets for nearly $16 million when it came on the market in 2014.
It was only a block away from the Giannini building Burkle had long coveted. Giannini Place wasn't for sale, but Burkle and Zobler persuaded the owner to sell it for more than $39 million.
Then came the hard part: turning the two beaten-down office buildings into luxurious inns with hundreds of bathrooms, elaborate restaurants and rooftop swimming pools with chic bars where patrons can sip evening cocktails in the glow of city lights.