$100M Loan On The Line LA Hotel In Default
The Line LA hotel in Koreatown could soon be up for sale.
RECP Sydell Wilshire defaulted on a $100M loan tied to the 384-room hotel when it failed to make a critical Jan.6 reserve payment, The Real Deal reported, citing public property records. The lender, Corten Real Estate Partners, could put the property up for sale in 90 days.
RECP Sydell Wilshire is a Delaware-incorporated company with ties to Ron Burkle, a grocery store magnate known more recently for his hotels, including the NoMad in Manhattan.
Burkle’s Yucaipa Cos. and hotelier Andrew Zobler’s Sydell Group teamed up to open The Line LA in the former Wilshire Plaza hotel in 2014. The boutique hotel has a pool, a lobby bar and a poolside restaurant in a large greenhouse.
Sydell no longer has a stake in the property or the hotel, TRD reported.
Yucaipa inked a $100M loan from Corten to refinance The Line LA in 2022, Commercial Observer reported at the time. The current balance of the loan is unknown.
Many hotel properties have struggled to fully recover after the pandemic, with tourism levels rising but falling short of 2019 levels. That has translated into trouble for owners.
The CMBS delinquency rate for hotels was 6.09% as of October 2024, just over the overall delinquency rate of 5.98%, according to Trepp data. The hotel sector fared better than office and retail CMBS loans, which were delinquent at a rate of 9.37% and 6.32%, respectively.
