Hotel moguls Ian Schrager and Ed Scheetz scored $116.5 million in bridge loans as they race to complete the West Hollywood Public Hotel, previously set to open in July.
Miami-based hotel investor Driftwood Capital and New York-based Benefit Street Partners provided the loan package for the 137-room hotel redevelopment project on the site of the former Standard Hotel.
The debt refinances a $121 million construction loan Schrager and Scheetz received in 2024, according to Cushman & Wakefield, which arranged the deal for Schrager and Scheetz.
The Public West Hollywood marks Studio 54 co-founder Ian Schrager’s return to the Sunset Strip for the first time since the 1990s, when he introduced his “urban resort” concept in the neighborhood with the launch of the former Mondrian Los Angeles at 8440 Sunset Blvd.
Schrager and Scheetz, the former chief executive of Morgan Hotel Group, seized the chance to place a new bet on the storied nightlife corridor in 2023, when they acquired the shuttered Standard Hotel property at 8300 Sunset Blvd. for $112.5 million, according to property records. The partners received an $86.7 million acquisition loan for the property from iBorrow, a commercial real estate lender based in Sawtelle.
Weight of history
The site comes with a lot of history that some in the neighborhood had hoped to preserve.
Chateau Marmont hotelier André Balazs took over the hotel at 8300 Sunset Blvd. – originally constructed in 1962 – in 1999 and opened the Standard Hotel. He later handed the brand over to investors who expanded it into an international lifestyle hospitality empire known for its upside-down logo and celebrity clientele.
But the chain’s original Sunset Strip location struggled after it was hit with a rent hike in 2019, according to parent company Standard International. Subsequent restrictions related to the COVID-19 pandemic became its death knell, and the West Hollywood Standard closed in January 2021.
West Hollywood’s Historic Preservation Commission attempted to add the property to the city’s cultural resources list in 2022. But that effort stalled and the new owners soon unveiled plans to redevelop it as the Public West Hollywood, expanding Schrager’s chic yet affordable Public Hotel brand that launched at 215 Chrystie St. on Manhattan’s Lower East Side in 2017.
The project also coincides with a new joint venture Schrager announced earlier this year between his firm, Ian Schrager Co., and hotel operator Highgate to expand the Public brand beyond its two current locations.
Back from the dead?
On the local level, the hotel redevelopment comes amid a surfeit of anxiety about the future of the Sunset Strip, which is dotted with papered storefronts. Despite a recent boost from “vanity” retailers and some new nightlife and hospitality tenants, retail vacancy on the corridor reached 10.3% this quarter, according to a report by Keller Williams Realty’s Marc Robinson.
Yet others watching the local data have a rosier outlook.
“We are seeing a significant resurgence across the Sunset Strip,” Cushman & Wakefield’s Rob Rubano said in a statement. “The timing could not be better for Public to capitalize on the momentum and anticipation building around this widely anticipated reopening.”
Rubano represented the borrowers on the refinancing together with JP LeVeque and Joe Lieske.
Schrager and Scheetz have stayed tight lipped about when exactly that reopening will occur. The developers previously announced an opening date for the Public West Hollywood on July 15. It’s unclear why the project missed that deadline, and a new opening date has not yet been announced. A representative for Public Hotels did not respond to a request for comment.
Spokespeople for lenders Driftwood and Benefit Street did not respond to requests for comment.
“I think having a hotel in L.A. – in what I consider to be the entertainment capital of
the world – is just absolutely appropriate,” Schrager said in a recent video posted on his company’s website. “California is about so many interesting and diverse things. It’s on the ocean. It’s next to the desert. It’s next to mountains. Not to mention, you know, the great weather. I think that having a hotel in California, having a hotel in L.A. in particular, is just a must for us.”
