CANOGA PARK'S ALEXANDER HOTEL TO BECOME APARTMENTS.

Byline: GREGORY J. WILCOX

CANOGA PARK - The Alexander Hotel never looked like it really belonged in the 20200 block of Sherman Way. That stretch of the broad boulevard hosts apartments, condominiums and fast-food joints.

Featuring an Italian restaurant that turned out what was reportedly the best ravioli in the San Fernando Valley, the hotel seemed better suited for Warner Center or NoHo rather than Canoga Park.

The latter is not known as a short-term business destination. It's a place where people go to live.

Now some investors are betting that the hotel will be a hit by being what it was intended to be in the first place: an apartment building.

It's been bought for $5.5 million by Warner Palms Apartments LLC, a private investment group.

``The problem was great business concept but wrong location. The location really killed the deal,'' said Bill Anz, a partner in Encino-based MAM Realty Advisors Inc., which has a stake in the hotel and advised the owners on the purchase.

Renovations are already under way.

The 100-room structure was built in 1964 as an apartment complex but has been a hotel for years. Past owners include the Clarion and Red Lion chains.

It will be converted back into one-bedroom apartments and suites and the restaurant space will be converted into a gym. There will also be some cosmetic changes to the facade. The property also features a pool, basketball court and swimming pool.

Alex Martinez, who along with Francisco Martin make up the rest of the MAM partnership group, said the former owners, Hotel Masters #1 LLC, did a nice job on maintaining the rooms and upgrading the property.

``Instead of being a hotel we thought it had a lot of potential being an apartment building,'' he said.

They are probably right.

The Valley's vacancy rate has been hovering around the 5 percent range, good news for owners.

The rent structure will be at the attractive end of the range, from about $700 to $800 for studios to $950 to $1,000 for the one-bedroom units. Some of the units should be move-in ready by November.

The partners have already tested the market by running an ad for the new apartments.

``We got an incredible response,'' Anz said.

Representatives of the former owners could not be reached for comment.

Irwin Woldman of Grubb & Ellis' North Los Angeles office represented both parties in the deal, which was unusual in one key aspect.

The hotel was never officially on the market.

``I had a good relationship with the owner of the property and a good relationship with the buyer and I just said are you interested and they said yeah,'' Woldman said.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com