Photo by G CRAWFORD
News broke in July that the 116-room hotel had a $100 million stalking horse bid but was headed to auction. The auction was later canceled, and the stalking horse bidder, now revealed to be New York-based EOS Investors, purchased the property.
“We are excited for the opportunity to expand the EOS portfolio with a world-class property in an unparalleled luxury hotel destination such as Beverly Hills,” EOS Investors President Jonathan Wang said in a statement.
In addition to hotel rooms, which average 805 square feet, the Viceroy L’Ermitage Beverly Hills has a rooftop pool and event deck. It also has a restaurant and bar, spa, fitness room and lounge.
The hotel is located at 9291 Burton Way, near Rodeo Drive.
“Viceroy L’Ermitage Beverly Hills represents a rare opportunity to acquire irreplaceable hotel real estate in a sought-after luxury market with significant long-term barriers to entry,” Tom Burns, vice president of EOS Investors said in a statement. “As we look to the future, we are focused on strategically investing capital to build upon the hotel’s storied legacy and position as a destination of choice for luxury travelers.”
The hotel underwent a $37 million renovation in 2016.
The Viceroy L’Ermitage Beverly Hills is located near the former Montage Beverly Hills, now Maybourne Beverly Hills hotel, which sold for $415 million to British hotel company Maybourne Hotel Group last year.
“What probably sums up the price and the huge amount of interest has to be location, location, location. A lot of the buyers looked at the price that was paid last year at the Montage Beverly Hills … and I think that that had a lot to do with the interest and the price point that people were at,” said Alan Reay, president of Atlas Hospitality Group.
EOS Investors has a portfolio of East Coast hotels, and Reay said the company is not focused on any one product type or on L.A.
“It really is an interesting company, and it’s also interesting that they purchased properties, a couple of them in 2019 and the most recent one in March of 2020,” he added. “A lot of buyers that we’ve dealt with, if they bought in 2018 or ’19, they are just trying to manage what they have and not out there actively pursuing new acquisitions so it’s interesting to see what they are doing.”
The Viceroy L’Ermitage Beverly Hills was previously seized in a money laundering scandal involving financier Jho Low before being offered at auction this summer.
Matthew Bordwin with real estate brokerage Keen-Summit Capital Partners handled the sale.
The hotel was one of several Low properties to be auctioned off after he was investigated in a $2.5 billion fraud scheme. He was accused of embezzling from a Malaysian sovereign fund.
The Viceroy L’Ermitage Beverly Hills was
A low-profile New York City-based hotel investor is the mystery buyer of the Beverly Hills hotel that the U.S. government sold in August, after seizing it from the fugitive Malaysian financier Jho Low.
EOS Investors LLC, a three-year old firm that owns and manages about 20 hotels, won the bidding process and on Thursday completed its purchase of the Viceroy L’Ermitage Beverly Hills hotel, according to the firm and the auction’s broker. A sales representative had said previously that the winning bid for the hotel was $100 million, but he didn’t disclose the buyer’s identity.
The sale marked the last of Mr. Low’s major properties to be auctioned by federal authorities, who allege he bought the hotel and other assets with money embezzled from a Malaysian government fund. U.S. and other authorities have previously sold Mr. Low’s private jet, luxury yacht, and his stake in the Park Lane Hotel overlooking Manhattan’s Central Park, among other possessions.
The L’Ermitage, an all-suite hotel located near the city’s posh Rodeo Drive, has attracted numerous entertainment moguls, foreign jet-setters, and movie stars over the years like Elizabeth Taylor and Laurence Olivier.
It also drew widespread interest from a crowd of potential buyers, said Matthew Bordwin, principal at Keen-Summit Capital Partners LLC, the firm that ran the sales process. There were about 800 potential buyers who expressed interest from all over the world—“from every continent but Antarctica,” Mr. Bordwin said—and 50 bids for the hotel.
In the end, none would top EOS’s offer. That price was the so-called stalking-horse bid, established to set a floor as the lowest price to complete a sale but one that also proved to be the high bid.
A number of factors prevented an even richer bid, including the brutal hotel environment during Covid and the travel restrictions that could have kept potential foreign buyers away, say people familiar with the process. The U.S. luxury segment has been hit particularly hard by the pandemic and the collapse of business travel: Revenue per available room in September fell 55% from a year ago, compared with only a 21% decline for economy class hotels, hotel data firm STR said.
Some also believed the price for the 116-room property was too steep at nearly the rate of $860,000 per room. But EOS President Jonathan Wang said the property represented a rare opportunity to enter the coveted Beverly Hills market and would prove to be a good long-term investment.
“Our plan is to bring back more luxury elements and make it a top destination in the market,” he said.
As for the previous owner, Mr. Wang added, “it adds some mystery to the hotel.”
Mr. Low was an adviser to a Malaysian government investment fund, known as 1Malaysia Development Bhd., or 1MDB. The U.S. government alleged he stole from the fund, and he agreed last year to forfeit more than