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Thursday, Jan 26, 2023

Sunset Strip Hotel Lands $230M Refinancing

 A hotel on the iconic Sunset Strip has received a $230 million loan to refinance.

J.P. Morgan and Mack Real Estate Credit Strategies provided the money to Edition at 9040 Sunset Blvd.

Newmark Group Inc.’s Dustin Stolly, Jordan Roeschlaub, Nick Scribani and associate Dan Morin arranged the financing.

“Lenders and investors alike are fighting to deploy their capital in top-tier, leisure-focused lodging assets, which are positioned to capture an outsized share of the pent-up travel and local demand,” Stolly said in a statement.

The hotel was developed in 2019 by Witkoff Group, and the Edition brand is owned by Marriott International Inc.

The property consists of 190 rooms — including 48 suites and two penthouses, plus 20 luxury residences — event space, a lobby lounge, a rooftop pool, basement club, restaurant and spa. The West Hollywood outpost is Edition’s West Coast flagship property.

It was previously financed in 2019 with a $300 million loan from Deutsche Bank and Mirae Asset Securities Inc. Newmark also secured that loan.
In June, the property reopened Ardor, a restaurant by Michelin-star chef John Fraser. The restaurant had opened in 2019 but closed for more than a year during the pandemic. And in July, its 6,200-square-foot spa reopened.

The refinancing follows last month’s news that the property’s 20 residences were sold. The units ranged from $5 million to $20 million.

Brokerage Douglas Elliman had the listing for the residences. Condo sales have been strong this year.

In June, the number of condo units sold in Los Angeles County increased 88% year over year to 1,941, and the median condo sales price was up 22.5% year over year to $625,000, according to data from Redfin Corp.

Big sales included Pendry Residences West Hollywood where one unit fetched more than $4,800 a square foot, a record. And “Friends” star Matthew Perry’s Century City penthouse sold for $21.6 million.

Edition’s recent refinancing isn’t the only high-dollar loan finalized in recent months.

A few weeks ago, it was announced that Beverly Hills-based Alagem Capital Group and London-based Cain International received a $500 million loan to refinance the Beverly Hilton and Waldorf Astoria Beverly Hills. Both hotels are part of the $2 billion One Beverly Hills development.

The loan was provided by Aareal Capital Corp. and Goldman Sachs Group Inc.

Aareal Capital is providing the $340 million senior portion of the loan, and Goldman Sachs is providing $160 million in mezzanine financing.

Once completed, One Beverly Hills will be a 17.5-acre mixed-use project. It will have three new buildings: two will be condominium towers, and the third will have 42 luxury hotel suits and residences. It is expected to be completed in 2026.

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans Welk is a managing editor at the Los Angeles Business Journal and the San Fernando Valley Business Journal. She previously covered real estate for the Los Angeles Business Journal. She has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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