The Reuben brothers helped finance Ian Schrager and Ed Scheetz’s recent acquisition of the former Standard hotel in Hollywood.
David and Simon Reuben, the U.K.-based investor brothers, teamed up with iBorrow, a bridge loan lender, to lend $86.7 million in financing for the acquisition, iBorrow announced on Thursday.
Schrager and Scheetz bought the property for $112.5 million earlier this month, records show, after a year of litigation-related delays over a billboard on the property. The two are planning to reopen the 139-key hotel under Schrager’s Public hotel brand.
The loan is due on Feb. 1, 2024, according to documents filed with L.A. County. The property will not open until after the loan matures, according to a statement from David Reuben.
In a statement, Schrager called the loan a “creative financing structure,” but did not provide further details.
The Reuben brothers have been particularly active in the U.S. over the last three years, spending about $4 billion through debt and equity investments. They’re also known for swooping into investments at mezzanine lenders, charging higher interest rates and then having the option to file a UCC foreclosure, which bypasses a regular court process.
In Century City, the brothers are involved in a lawsuit with a group of EB-5 lenders over Michael Rosenfeld’s Century Plaza redevelopment, a $2.5 billion project at 2050 Avenue of the Stars.
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The lender group claims the Reubens reshuffled the debt stack over the course of four years to eventually hold about $1.2 billion in senior and mezzanine loans. By doing so, the brothers have whittled away the rights of more junior lenders to reclaim loan payments, the EB-5 lenders said in their complaint.
The Reubens recently settled a separate lawsuit with a DigitalBridge-controlled entity over the same project, according to a spokesperson. The foreclosure on Century Plaza is now set for March 1, records show.