Standard Hollywood on sales block
Once-trendy 139-key hotel ended 22-year run with permanent shutdown in January
The Standard Hotel in West Hollywood has gone from one-time trendsetter for the stars to the sales block, The Real Deal has learned.
“The property is up for sale by the owner of the underlying real estate,” a spokesperson from the hotel operator’s parent company, Standard International, said on Monday. “We are very hopeful to bring the hotel back to life as the Standard” with whoever buys the building.
Rittersbacher Sunset LLC has owned the land under the hotel at 8300 Sunset Boulevard since 1989, records show. The LLC is linked to Randy Garitty of Oregon.
The 139-key hotel caused a stir on the celebrity scene in Los Angeles when Andre Balazs opened the property in 1999. It had operated as part of Standard International ever since, with Balazs no longer affiliated with the company and the lease on the building is in the hands of Ferrado Group.
Ferrado Group was a middle-man in the structure, leasing the building from landowner Rittersbacher Sunset and, in turn, collecting rent from Standard International.
The structure began to fracture when the Standard Hollywood shut down in January. The move came after Rittersbacher Sunset exercised an option to raise the rent on the operator in 2019.
The increase “rendered it unsustainable to operate the hotel,” a spokesperson for Standard International said at the time.
Ferrado apparently sought to avoid passing along the big hike in costs to Standard International by suing Rittersbacher Sunset in July 2020, claiming the latter unfairly raised the rent due to an “erroneous appraisal method,” according to court documents. Rittersbacher claimed the property was valued at around $61 million — 12 times the value used in rent calculations at the time, bringing annual rent to $4.9 million, Ferrado said.
“Rittersbacher’s demands to increase the rent unilaterally due to its incorrect appraisal threatens to result in the forfeiture of a large hotel, as well as financing, cashflow, and renovation costs that could reach into the tens of millions of dollars,” Ferrado said in its complaint.
Rittersbacher Sunset denied Ferrado’s allegation, adding it has “not charged an illegal rent,” but “simply asserted its position as to what the proper amount of rent should be.”
Ferrado and Rittersbacher settled the suit in June, court documents show. Settlement terms were not disclosed, but a spokesperson for Standard International said Ferrado is
“no longer involved.”
Neither Ferrado nor Rittersbacher responded to requests for comment.
Hotel sales in Los Angeles have skyrocketed since the start of the pandemic. Across the county, 48 hotels changed hands in the first half of 2021. The 580-key Hyatt Regency at LAX and the 175-key Le Merigot hotel in Santa Monica both changed hands for $75 million — the most expensive hotel sales in Los Angeles this year.