SLS Hotel at Beverly Hills Gets $33M in Preferred Equity from Lowe Enterprises Investors

As it nears the November opening of its luxury SLS Hotel at Beverly Hills (pictured), SBE has received $33 million in preferred equity from the Lowe Structured Investment Fund, a discretionary investment fund managed by Lowe Enterprises Investors. A source close to the deal told CPN that the total price tag is roughly $229 million, including acquisition and renovations.“This property is a solid fit with the loan criteria established for our fund,” said Philip Peters, LEI executive vice president and portfolio manager for the fund, which offers mezzanine debt and preferred equity for commercial, residential and hospitality properties in the United States and Canada. “It has a prominent position in one of the country’s top hotel markets and a respected local ownership group.” Peters added in a LEI news release that SBE, a privately-held company founded and run by CEO Sam Nazarian, is “renovating an existing hotel in an irreplaceable location, thus significantly increasing the value of what was an underperforming property.”Located at 465 La Cienga Boulevard and occupying an entire city block, the 270,000-square-foot hotel was previously operated as the Le Meridian Beverly Hills. CPN reported Dec. 1, 2005, that SBE Hotel Group had acquired the 297-room property and planned to reposition and renovate it. The company had received non-recourse $114.5 million in financing for the acquisition and renovations. CPN noted then that SBE was able to acquire the Le Meridian at about 30 percent below replacement cost. SBE officials could not be reached for comment, but has previously said that the hotel fits in well with its focus on creating unusual, lifestyle-driven properties in major cities. It is also convenient to business centers, cultural attractions and nightlife. Founded in 2002, Los Angeles-bases SBE is also known for its Restaurant and Nightlife division, which owns a number of trendy Los Angeles restaurants and clubs, as well as real estate development and independent film production. SBE also owns the Las Vegas Sahara Hotel & Casino, which it acquired along with Stockbridge Real Estate Funds, in March 2007. Redevelopment of The Sahara is expected to be done in early 2011 and renovations at the company-owned Ritz Plaza in Miami should be completed in 2009.Starwood Hotels & Resorts Worldwide Inc. will manage SLS at Beverly Hills under its Luxury Collection brand. The hotel features Philippe Starck designs and culinary programs overseen by Spanish chef Jose Andres and The Bazaar, a shop without walls designed by retailer Moss that will be integrated throughout the hotel’s public areas. It will offer more than 30,000 square feet of indoor and outdoor banquet and meeting spac e and a rooftop pool and bar. Lowe Enterprises Investors, also headquartered in Los Angeles, has bought or originated more than $500 million of structured debt investments, primarily on hospitality properties. Lowe Enterprises, a national investment, development and management firm, is currently developing $3 billion of real estate assets in the United States. Its investment management affiliate manages more than $4 billion in assets for its investment and institutional clients. Most recently, Lowe Enterprises refinanced Century Center I and II, a 624,600-square-foot office complex in Arlington, Va., for $116.1 million, according to a July 30 CPN article.