Sales  ·  Hotels

Oaktree, Trinity Buy Hollywood’s W Hotel for $197M

Sale comes at a loss for Host Hotels & Resorts

reprints


One of the most well-known hotels in Hollywood is set for a major makeover.

A joint venture of Oaktree Capital Management and Trinity Fund Advisors has acquired the leasehold interest in the luxury 305-room W Hollywood for $197 million. The new owners say they plan to “completely reposition” the hotel and make significant upgrades for all guest rooms and public areas as they try to tap into the expansion of “techtainment” in Hollywood.

SEE ALSO: Watch Shop Avi & Co. Buys Former Playboy Club for $27M in Foreclosure Auction

Oaktree and Trinity acquired the property from Host Hotels & Resorts, which bought the property for $219 million in 2017. The development reportedly cost around $350 million to build.

The W is located at 6250 Hollywood Boulevard, surrounded by at least half a dozen landmarks, including the Pantages Theatre across the street, and the Capitol Records Building about a block away. It’s one of the most easily identified structures, with massive billboards and, of course, large bright red “W” signs.

The sale comes at a precarious time for the hospitality industry. Hotel bookings in L.A. reportedly returned to 100 percent of their pre-pandemic levels in October and November, but the omicron variant is causing great concern for travelers, and other modern hotels like the Standard hotels in West Hollywood and Downtown L.A. have closed indefinitely.

James F. Risoleo, president and CEO of Host Hotels & Resorts, said the sale reduces the firm’s ground lease exposure and “obviates the need for major capital investment and associated disruption.”

“We continue to be very active on the capital allocation front as we target new markets,” he said.

When the W Hollywood opened in 2010, Christopher Hawthorne, former architectural critic for the Los Angeles Times, said, “few recent projects have had more to say about the state of contemporary urbanism in Southern California than this one.” 

“It symbolizes almost perfectly a city that is groping toward a denser, more vertical and more public future while still reluctant to abandon its love affair with the car and the glossier, more exclusive corners of celebrity culture,” he wrote.

Trinity Fund Advisors is an affiliate of Trinity Real Estate Investments, based in L.A. and Honolulu. Meanwhile, L.A.-based Oaktree has $158 billion in assets under management as of September, and last month, announced a major opportunistic fund and the largest in the firm’s history at $15.9 billion

Host Hotels & Resorts says it’s the largest lodging real estate investment trust and one of the largest owners of luxury hotels. It currently owns 75 properties in the United States and five properties internationally totaling approximately 45,300 rooms.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com