With historically low occupancy rates, hotels are floundering to the 2020 finish line. But, the worst can be in the rearview mirror for destinations like Southern California.
For the most recent example, Slate property group and Atalaya Capital Management partnered to provide a $ 30 million mezzanine loan to reposition the former Hotel Cecil in downtown Los Angeles in a multi-family and boutique hotel. The financing – along with a $ 15 million senior loan from Centenary Bank – is in addition to a slight increase in investments in the hospitality industry and hotel development in Southern California, compared to the blocked market observed throughout the coronavirus epidemic.
Hotelier Richard Born acquired the historic 700-room property in 640 South Main Street in June 2014, and based in New York Simon Baron Development Group, the borrower of the $ 30 million mezz loan, acquired the ground lease in 2016.
Many large tourist centers like LA still don’t have tourists, convention centers are still absent from their weekly conferences and business events, and the hospitality industry is still struggling with some of the biggest drops in revenue. Of the history. At the start of the last quarter, nearly a fifth of securitized loans to hotels in the United States were at least 30 days past due, according to a report by Trepp.
The LA hotel market has not escaped the tumult, especially with the closing of Rodeo Drive Luxury Hotel in Beverly Hills. But, Southern California should see the first signs of a recovery, thanks to its advantage as a destination for people around the world.
Recently, Global management of Apollo provided $ 56.5 million help finance EOS Investors” $ 100 million acquisition of Viceroy L’Ermitage Beverly hills. Earlier this month, the Newport Beach Marriott Hotel & Spa sold for $ 198.5 million. And, last week, Sunstone Hotel Investors sold the Renaissance Los Angeles Airport Hotel for $ 92.5 million.
The Cecil opened in the ‘Roaring Twenties’, but it has a decidedly checkered history, due to the Great Depression, other periods of economic downturn and its proximity to Skid Row. Plus, he was so strongly associated with crime that he inspired a season of “american horror story”And it has been called“ the deadliest hotel in LA ”, following a number of murders and suicides there, as well as housing various serial killers. It was renamed Stay on main, but people still call it the Cecil, and the building became a historical and cultural monument in 2017.