JW Marriott Santa Monica sells for $75M

Stockdale Capital buys 175-key hotel from Columbia Sussex, which was accused of misusing PPP funds

Los Angeles /
May.May 20, 2021 01:15 PM
Stockdale Co-Founders Shawn and Steven Yari with 1740 Ocean Avenue (Google Maps)
Stockdale Capital Partners bought the 175-key hotel. Co-Founders Shawn and Steven Yari, with the property at 1740 Ocean Avenue (Google Maps)

The J.W. Marriott Le Merigot hotel in Santa Monica sold to Stockdale Capital Partners for around $75 million, The Real Deal has learned.

Stockdale’s managing director for hospitality, Bill Doak, confirmed the sale but would not provide an exact dollar amount. The seller was Kentucky-based Columbia Sussex, which operates hotels across the country, and which was embroiled in a scandal over alleged misuse of federal Paycheck Protection Program last year.

Stockdale acquired the leasehold interest in the Le Merigot and did not seek financing, Doak said. The deal closed May 11. The California-based investment firm owns hotels in Scottsdale, Arizona, and medical and office space in California.

Columbia Sussex listed the hotel, at 1740 Ocean Avenue, earlier this year. Like hotel owners across the country, Columbia Sussex was slammed by the coronavirus. In late January, three of its hotels were in foreclosure and the firm had at least $1.3 billion in CMBS debt, Bloomberg reported. The firm did not respond to multiple requests for comment.

Westwood-based Stockdale is just the latest Los Angeles-based investment firm to hunt for hotel acquisitions in the pandemic. Bainbridge DXS and its management wing Torrey Pines Hotel Group, launched a $500 million fund earlier this year to buy up to 200 distressed properties.

Like other hotels hit hard by the pandemic, Columbia Sussex tapped federal funding through the government’s PPP loan program. But in October, eight Congress members — including three from the L.A. area — asked the Small Business Administration to investigate Columbia Sussex for allegedly misusing the funds. They contended Columbia Sussex accepted $63 million in PPP funding intended to keep workers employed, but ended up laying off thousands of people.

Before the pandemic, Le Merigot housekeeping staff had filed complaints with California, alleging the company withheld wages and failed to pay overtime, according to Unite Here, a labor union that represents around 50 workers at the hotel. The state is expecting to hold hearings on the complaints in the coming weeks.

Now that the hotel has a new owner, the union has higher hopes. Kurt Petersen, co-president of Unite Here Local 11, said he was excited to work with Stockdale, adding union members want “peace, not to continue the war.”






    Related Articles

    arrow_forward_ios
    Plans for the Woodland Hills project with Urban Stearns co-founder Shy Cohen (Togawa Smith Martin, Urban Stearns)
    Urban Stearns plans apartment, hotel project in Woodland Hills
    Urban Stearns plans apartment, hotel project in Woodland Hills
    Relevant Group co-founders Grant King and Richard Heyman (Facebook via Related)
    Relevant Group co-founder Richard Heyman exits firm
    Relevant Group co-founder Richard Heyman exits firm
    Hyatt Regency LAX and Southwest Regional Council of Carpenters CEO Dan Langford (Hyatt)
    LAX Hyatt Regency changes hands for $75M
    LAX Hyatt Regency changes hands for $75M
    Rendering of the Project (City of Pasadena Design Commission / WATG)
    Medical office plans swapped for hotel proposal in Pasadena
    Medical office plans swapped for hotel proposal in Pasadena
    Rendering of the project (NMDA for CIM Group)
    CIM drops residential units at proposed West Hollywood hotel
    CIM drops residential units at proposed West Hollywood hotel
    Renderings of the project (The Harper on Sunset)
    Hotel, apartment complex planned on Sunset Strip
    Hotel, apartment complex planned on Sunset Strip
    The Chateau Marmont (Getty) and protest signs (Unite Here Local 11)
    Chateau Marmont workers say iconic West Hollywood hotel misused rescue funds
    Chateau Marmont workers say iconic West Hollywood hotel misused rescue funds
    (Proper Hotel, Google Maps)
    Downtown LA’s Proper Hotel to open in July after years of delays
    Downtown LA’s Proper Hotel to open in July after years of delays
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...