New Majority Owner for Sunset Tower Hotel
- Dec 04, 2015
Sunset Tower Hotel, a legendary hot spot in West Hollywood known for attracting A-list celebrities, has a new majority partner. Elevated Returns acquired an 80 percent stake in the hotel that’s valued at $75 million from KKHG Sunset Tower L.L.C., an investment group headed by Peter Krulewitch.
Renowned celebrity hotelier Jeff Klein will retain his 20 percent stake in the 81-key, Art Deco boutique hotel at 8358 Sunset Blvd. Klein will continue to manage the hotel, which opened in 1931 and was named to the National Register of Historic Places in 1980.
Klein and Krulewitch bought the property in 2004 for $18.5 million, according to the New York Post.
Elevated Returns is led by Stephane De Baets. The same ownership team acquired the St. Regis Resort in Aspen, Colo., and created the successful Chefs Club restaurants in aspen and New York.
“This asset fits perfectly with our strategy to acquire unique, irreplaceable assets run by seasoned professionals,” De Baets said in a prepared statement. “West Hollywood is booming and we are proud to have found a way into owning a substantial stake in the classiest asset on the Sunset Strip.”
“I’ve been searching for the right partner for awhile and am very lucky to have found someone who appreciates Sunset Tower’s unique pedigree,” Klein said in a statement. “In addition to our collaboration on Sunset Tower, I’m also excited that I’ll have the opportunity to work with him on other projects in the future.”
The hotel, which has an outdoor pool, spa and salon, fitness center, is also known for its Tower Bar and Restaurant.
JLL’s Hotels & Hospitality Group handled the deal with International Directors Jeffrey Davis and John Strauss and Senior Vice President Tony Muscio leading the team.
“Sunset Tower is one of the most prominent and storied hotels in West Los Angeles,” Davis said. “Stephane De Baets and his team, along with the original visionary Jeff Klein, are the perfect fit to usher in the new era of Sunset Tower and everything it has to offer.”
“Sunset Tower’s Art Deco, classic Hollywood charm combined with its irreplaceable location and strong operating performance has fueled a high price per key within the dynamic West Hollywood and greater Los Angeles lodging market,” added Muscio.
The city’s hospitality market is thriving, according to a blog posting by JLL’s Los Angeles team.
“In the first three quarters of 2015, the Los Angeles hotel market has seen healthy growth with average daily rates up by eight percent and revenue per available room up by nine percent, higher than other large gateway cities and above the national average,” the JLL Los Angeles blog stated.
The JLL Hotels & Hospitality Group has worked with the new owner before, helping it secure $75 million in financing for the St. Regis Aspen Resort in June 2013. The JLL group, with a global team of about 340, has completed more transactions than any another hotels and hospitality real estate advisor in the world, totaling $51 billion over the last five years.