John Rutledge’s Godfrey Hotel Hollywood is in trouble with its lenders.
Lenders led by an AllianceBernstein fund took the first step toward foreclosing on $59.1 million worth of debt tied to the five-year-old hotel at 1400 N. Cahuenga Blvd., according to a default notice recorded in October.
Rutledge’s Oxford Capital Group bought the 20,000-square-foot development site in 2016 for $16.5 million amid a hotel building boom in Hollywood.
The Chicago-based firm took five years to complete the 220-key Godfrey Hollywood – one of the line of boutique hotels Oxford launched in Boston, Detroit and Chicago.
Oxford’s joint venture partner, Goldman Sachs, sold its stake in the seven-story Cahuenga Boulevard property the following year to Related Fund Management, the asset management arm of New York-based Related Cos., in a deal that valued the property at $114 million, or about $518,000 per room, according to a June 2022 deed.
A lender group registered in Luxembourg and led by Nashville-based investment manager AllianceBernstein provided a $76.5 million variable-rate loan for the acquisition, according to a deed of trust recorded the same day.
Oxford described the 2022 deal in an announcement as a recapitalization of Godfrey Hollywood’s construction debt, with Related taking over the property’s preferred equity and AllianceBernstein providing new senior debt.
The handoff was “a testament to the resilience and growth prospects of Los Angeles and the dynamism of the Hollywood submarket,” Rutledge said in a statement at the time.
It’s unclear if Rutledge’s firm retained a stake in the property, although it continues to operate the Godfrey Hollywood through its hotel management arm, Oxford Hotels & Resorts, according to the company’s website. A spokesperson for Oxford did not respond to a request for comment.
Maturing loans
Lenders have moved against Oxford-run hotels in other cities. In February, New York-based Quadrum Global sued to foreclose on Oxford’s 221-room Godfrey Hotel in Chicago, which is partially backed by a $23.5 million EB-5 visa program subordinate loan, The Real Deal previously reported. And in 2024, Oxford handed four San Francisco hotels back to their lenders. Rutledge’s firm stayed on as the operator of those properties.
The loan tied to the Godfrey Hollywood matured this year while the hotel’s owners have failed to pay up, property records show.
The borrower defaulted on $59.1 million worth of debt and is now facing foreclosure, according to the Oct. 8 notice. The lenders could elect to sell the hotel’s furniture and fixtures together with the building in a single foreclosure sale, the notice says.
Representatives for Related and AllianceBernstein did not respond to requests for comment.
The Godfrey is one of several large hotels that broke ground in the neighborhood before the 2020 pandemic caused construction delays.
Adolfo Suaya, a restaurant and hotel owner who built the 134-room Whisky Hotel at 1717 Wilcox Ave., previously told the Business Journal Hollywood “now is booming” and said the construction wave five years ago was “just the beginning.”
That prophecy didn’t quite come true. A few of Hollywood’s new hotels have since changed hands, including the former Tommie Hollywood, which opened at 6516 Selma Ave. in 2021, but was taken over by Marriott International and rebranded as Hollywood Volume in 2024. And the former Thompson Hollywood at 1523 Wilcox Ave. also closed and reopened last year as the Hollywood Grande, also owned by Marriott.
