Sacramento’s historic Senator Hotel going on the auction block

Downtown Sacramento’s Senator Hotel – scene of legendary backroom legislative deals and ties to a failed presidential assassination attempt – is up for sale.

By auction.

Building owner LNR Property of Miami will take bids on May 18 and 19 for the U-shaped, 160,000-square-foot building that opened as lodging in the 1920s and was converted to office use in the early 1980s.

The likely ultimate sale price? “Well north of $210 or $215” a foot,” or more than $34 million, said Rob Cole, a senior vice president with the Sacramento office of Jones Lang LaSalle, which is marketing the property.

The auction format – conducted online – is LNR’s “preferred platform,” Cole said. “It’s new to us.”

But he said it offers certain advantages compared with conventional methods, such as bringing in new potential bidders and providing total transparency. “You can’t argue (as a seller) that you didn’t get your best price or (as a bidder) that you didn’t know what others were offering,” Cole said.

LNR, which took over the property in 2011 following a deed in lieu of foreclosure by a previous owner, briefly considered selling the Senator two years ago but held off when offers were about $27 million, according to industry sources.

The 10-story building, directly across from the Capitol at 1121 L St., opened in 1924 and was for many years a premier overnight spot for visiting dignitaries and a hangout for power brokers like lobbyist Arthur “Artie” Samish, who maintained a suite there in the 1930s and 1940s and was known for wielding enormous clout over legislation affecting his clients: movie studios, racetracks, lawyers, insurance companies, and cigarette and liquor interests.

The Senator gained international attention in 1975 when Charles Manson family cult member Lynette “Squeaky” Fromme aimed a gun at then-President Gerald Ford after he emerged from the building and was approaching the state Capitol. She pulled the trigger but the gun didn’t fire.

Because of its strategic location, the building became a top locale for lobbyists after it was converted to office use in 1982. But it declined over the years and took a big hit in late 2010 when the California Housing Finance Agency moved out, reducing building occupancy to about 50 percent, said Greg Levi, a JLL managing director and leasing specialist.

Occupancy now is about 72 percent, he said.

A major renovation of the lobby – including a new chandelier, updated furniture and fresh paint – was completed in recent months, but other common spaces and mechanical systems need upgrades.

“It’s a great opportunity for an investor to come in and add value at one of the best-located buildings in downtown,” Cole said, noting that its proximity to the Capitol allows lobbyists and others to get from their offices to legislative hearings in a matter of minutes.

Chris Strain, an office leasing specialist with Cushman & Wakefield, agreed that the Senator is “the best location in Sacramento, period.”

But he said it offers many challenges that will require a creative development team.

For one thing, he said, many of the floor layouts are “functionally obsolete.” Other problems include low ceilings, limited window lines and numerous interior columns, he said.

But, he said, “for the right buyer with a vision, it could be a home run.”

One possibility, he said, would be converting the building back to its original use, either as a boutique hotel or for housing.

But Cole said his team considered those options and found them problematic. “You just can’t get the same kind of revenue” from those uses as you would from office rentals, he said.

The sale of the Senator is being conducted through Auction.com. Interested parties must put up a $50,000 deposit. The bidding will start at $9 million, according to the auction site, with incremental increases until a winner emerges on May 19.

This story was originally published April 9, 2015 at 5:40 PM with the headline "Sacramento’s historic Senator Hotel going on the auction block."