The money came from Aareal Capital Corp. and Goldman Sachs Group Inc.
Aareal Capital is providing the $340 million senior portion of the loan while Goldman Sachs’ Broad Street Real Estate Credit Partners III fund is providing the $160 million in mezzanine financing.
The loans are for three years with two options to extend for a year each for a total of five years. They replace an existing loan on the hotels.
“This strong commitment from highly regarded institutions is a major milestone for our project and further underpins our belief in the bright future for the hospitality industry and global gateway cities,” Jonathan Goldstein, chief executive and co-founder of Cain International, said in a statement. “We are thrilled to be working with an exceptional investor base and look forward to building on our relationship with Goldman Sachs and Aareal Capital as we progress with the delivery of the One Beverly Hills masterplan.”
Alagem Capital Group, led by Beny Alagem, is the developer of the Waldorf Astoria Beverly Hills and the longtime owner of the Beverly Hilton. The two partnered in 2018 and later acquired a development site at 9900 Wilshire.
The partners plan to create a massive development at One Beverly Hills. Once completed, the property will be a 17.5-acre mixed-use project, which will include the Waldorf Astoria Beverly Hills and the Beverly Hilton.
The Beverly Hilton opened in 1955. It has 566 recently renovated guestrooms, and its event space is used for events such as the Golden Globes. As part of the development, the hotel will be upgraded.
The Waldorf Astoria Beverly Hills has 170 guest rooms and suites, a spa and meeting space.
One Beverly Hills will also have three new buildings. Two will be condominium towers, and the third will have 42 luxury hotel suites and residences.
The project will also have 8 acres of botanical gardens.
One Beverly Hills is expected to be completed in 2026. It was approved by the Beverly Hills City Council in June.
Alagem Capital and Cain International agreed to pay $100 million to the city for not including affordable housing units in the project. It will be paid out over the next eight years.
Hotels seem to be making a comeback. After a slow 2020, the first half of 2021 saw hotel sales hitting record highs, surpassing levels seen prior to the pandemic.
In the first half of the year, hotel sales in L.A. County increased 188% compared to the first half of 2020, according to a report from Atlas Hospitality Group.
The value, meanwhile, skyrocketed 556% while the median sale price per room increased 5%.
This year has also seen the highest number of individual sales on record and the highest dollar volume of transactions.
Condos have also seen a boom in sales, which experts attribute to multiple factors including nonlocal buyers looking to purchase real estate in L.A.
In June alone, the number of units sold was up 88% year over year, and the median sales price was up 22.5% year over year, according to data from Redfin Corp.
For reprint and licensing requests for this article, CLICK HERE.