MetLife Investment Management and Loews Hotels & Resorts have put their Hollywood hotel up for sale – at a heavily reduced price.
The firms have listed the Loews Hollywood Hotel with a guide price of $125 million – about $40 million less than the price Loews paid for the property in 2012, according to Real Estate Alert. The guide price is about $200,000 per room.
MetLife, which formed a joint venture with Loews in 2012 and owns a 50 percent stake in the hotel, did not respond to a request for comment. The listing is held by Eastdil Secured.
The 625-room hotel, located on the edge of Ovation Hollywood, a shopping center formerly known as Hollywood and Highland, is being touted as a redevelopment opportunity – or a chance to be taken over by a new brand.
After Loews and MetLife purchased the property at 1755 Highland Avenue, the duo planned a $26 million renovation of the hotel.
In 2021, Loews and MetLife received $91 million from Värde Partners, an alternative investment firm, to refinance the 625-room hotel and replace debt with HSBC, records show. That debt was then bundled into a collateralized loan obligation deal.
At $125 million, the deal would be well below replacement cost, says Alan Reay, head of brokerage firm Atlas Hospitality Group.
In the 1990s, the developer TrizecHahn spent even more money on renovating and expanding the hotel.
In the first six months of this year, 16 hotels were sold in Los Angeles County for a total of $212.5 million, according to data from Atlas Hospitality. That’s a nearly 80 percent drop from the 17 hotels sold for a total of $1 billion in the first half of 2023.
Both interest rates and the City of Los Angeles’ transfer taxes on commercial sales have hampered business.
While Loews plans to sell off its Hollywood properties, the company is investing in others across the country. In Dallas-Fort Worth, the hotel chain plans to renovate the 311-room Sheraton Arlington Hotel at an estimated cost of $410 million. Loews would finance the project with equity and debt.
In Miami, Loews recently refinanced its oceanfront Miami Beach hotel with a $305 million loan that was bundled into a mortgage-backed securities transaction.
