Some brokers and buyers question the high asking price for the 683-room hotel, the third-largest in downtown Los Angeles after the Westin Bonaventure and Wilshire Grand. Nonetheless, its ornate ballrooms and landmark profile will draw an exceptionally high price in a seller’s market.

“There’s a lot of money out there chasing very few properties,” said Alan Reay, president of Costa Mesa-based hotel brokerage Atlas Hospitality Group, who doubts the Biltmore will fetch so much. “It’s the best market for selling trophy hotel properties that I’ve seen in 10 years.”

Mark Tarczynski, a first vice president with CB Richard Ellis Inc., confirmed he has been hired to market the Biltmore property for WHB Corp., a subsidiary of London-based Millennium & Copthorne Hotels PLC.

The firm recently sold the famed Plaza Hotel in New York for $675 million – also a record.

Tarczynski declined to comment about possible pricing for the hotel. Millennium’s North American headquarters in New York didn’t return calls.

If the Biltmore is sold for $500 million, the hotel would set a new record for price per room in Los Angeles County, Reay said. Currently, Kava Holdings Inc. holds the record, for paying $62 million, or $650,000 a room, in 1995 for the Hotel Bel-Air. At $500 million, the Biltmore would sell for slightly more than $732,000 a room.

The asking price is believed to be bolstered because occupancy and average daily room rates are improving at upscale downtown hotels, and the Los Angeles City Council recently agreed to help fund construction of a new 1,200-room convention center hotel – a development Tarczynski and others believe will only make the downtown hotel market stronger.

But even if part of the Biltmore were converted into for-sale housing, Reay remains skeptical that hotel buyers will pay more than $250,000 a room, or close to $171 million.

“I don’t think you can get more than that downtown,” he said. “I don’t see someone paying that unless they are looking at a completely different play on that and trying to convert the whole thing to condominiums, but that seems very unlikely.”

The 82-year-old hotel comes with an attached 24-story office building called the Biltmore Tower, of which 130,410 square feet is nearly fully occupied; and 238,243 square feet of office space within the hotel called the Biltmore Court, which is nearly empty.

Tarczynski said he will market the hotel’s office space as a possible conversion to high-end condominiums. “It’s vacant office space,” Tarczynski said. “If the new owner comes in and creates high-end luxury condos dependent on hotel services, it would be good for the city and the union because it would create more jobs and creates more needed housing.”

Developers have already shown they are willing to pay a steep premium for hotels they can convert into condominiums. Last year, New York-based Related Cos. paid $123 million for the 297-room St. Regis hotel in Century City, or $414,000 a room. If it can receive the necessary city approvals, the company plans to convert the 14-story tower into expensive condos.