The Line LA, a boutique hotel located at Ardmore and Wilshire in Los Angeles Koreatown, is on the verge of foreclosure after failing to repay a $100 million loan.
According to real estate media outlet The Real Deal, the hotel at 3515 Wilshire Blvd. has defaulted on its loan, putting its ownership at risk. Billionaire investor Ron Burkle’s private investment firm Yucaipa Companies secured the loan from lender Corten Real Estate Partners in 2022 as part of a refinancing deal.
However, the hotel’s operating company, RECP Sydell Wilshire, failed to make both its loan payment and an ‘Operating Shortfall Reserve Payment’ on January 6, signaling financial distress.
The reserve payment serves as a financial buffer when hotel revenues fall short of covering operating expenses and debt obligations. The inability to make these payments has triggered a loan default, which allows Corten to list the property for sale within 90 days.
The Line LA, a 384-room hotel, was originally the Wilshire Plaza Hotel before being acquired and redeveloped by Burkle’s Yucaipa Companies and Andrew Zobler’s Sydell Group in 2011.
The duo gained industry attention after successfully launching NoMad Hotel in Manhattan in 2012, later expanding their business-focused hotel developments to Los Angeles and Washington, D.C.
However, tensions between Burkle and Zobler escalated over the years. In 2017, Yucaipa attempted to remove Zobler but failed. The dispute led to a legal battle, with Zobler suing Burkle, who countersued in 2019, accusing Zobler of poor management that weakened the hotel’s profitability.
Their prolonged legal conflict ended in 2021 when Sydell sold the hotel’s brand operations to Soho House, marking their final split.
Burkle, now the board chairman and majority shareholder of Soho House, is reportedly exploring the possibility of taking the company private.
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
