UPDATED, June 30, 2022, 1:27 p.m.: Related Companies’ fund management affiliate has spent about $115 million to buy a stake in a new Hollywood hotel, The Real Deal has learned.
Ownership of the 220-key Godfrey Hotel Hollywood was transferred to an entity linked to Related Fund Management in New York for around $522,700 per key in a recapitalization effort, according to public property records filed last week with Los Angeles County. Justin Metz, a managing principal on the affiliate, was a signatory on that entity.
The company also scored a $76.5 million loan from an AllianceBernstein fund in connection with the deal for the property, located at 1400 North Cahuenga Boulevard, records show. Related declined to comment.
Chicago-based developer Oxford Capital Group — affiliated with Oxford Hotels and Resorts — sold stakes in the property, after working on its development for years. The project was a joint venture between Oxford and Goldman Sachs. Oxford will continue to hold a stake in the property, though Goldman has exited completely, a source familiar with the deal told The Real Deal.
The company had bought the site for the hotel for $16.5 million in 2016 and opened the property last year. The hotel is one of four Godfrey-branded hotels across the country, the others being in Boston, Chicago and Tampa.
Despite the pandemic’s effect on occupancy rates, investors have continued to pour money into California hotels, with last year seeing new records for the asset class. Investors spent a total of $9.9 billion on hotels in California in 2021, with 510 hotels trading hands, according to hotel brokerage firm Atlas Hospitality Group. The previous record was set in 2014, when about 400 hotels sold.
Related is following suit, with the new acquisition, Related adding to its bets on the recovery of the hotel sector in L.A.
Next month, the company is planning to open its $1 billion hotel, residential and retail project called the Grand L.A. The project, designed by Frank Gehry, will include the 28-floor Conrad hotel and an adjacent 45-story apartment tower.