Lender On The Line LA Buys Property Out Of Foreclosure For $68M

Corten Real Estate Partners purchased The Line Hotel in Koreatown last month, marking Los Angeles County's largest hotel sale of the year.

Corten paid $68M for the 390-room hotel following the February default of a $100M loan also issued by Corten, according to documents filed with the Los Angeles County Recorder and a midyear report from Atlas Hospitality Group. 

According to recorded documents, the full amount of debt on the property was approximately $106M. The sale was recorded June 3. 

It's not clear what, if anything, will change at the property due to the sale. Corten did not immediately respond to a request for comment from Bisnow. 

In February, the roughly 390-room hotel’s previous owner, RECP Sydell Wilshire, defaulted after failing to make a critical Jan. 6 reserve payment. 

RECP Sydell Wilshire is a Delaware-incorporated company with ties to Ron Burkle, a grocery store mogul and investor in hotels such as the NoMad in Manhattan, Bisnow previously reported. 

As comparatively higher interest rates and a stubborn disconnect between buyer and seller price expectations persist, hotel sales transaction numbers have remained muted, the authors of Atlas Hospitality Group’s midyear report wrote. 

In Los Angeles County, hotel sales transactions increased by 12.5%, though dollar volume increased by 14%. 

The largest hotel sales in two other Southern California counties, Alameda and Santa Clara, were also lender foreclosure sales, according to the report. 

Hotel industry professionals have said that the deck is stacked against hotel owners and operators at an inopportune time as the city heads into a yearslong blitz of megaevents culminating in the 2028 Olympics.

International travelers have tapered off, economic uncertainty has thrown cold water on the leisure travel boom that cropped up in the postpandemic lockdown and business travel has not yet rebounded from prepandemic lows.