Those hoping to place a bid on the Sunset Tower Hotel, which was for sale for $100 million, are about to have their dreams dashed. The Sunset Strip hotel is selling to hotelier Jeff Klein, who already owned a roughly 20-percent stake in the property, The Real Deal reports.
Klein “unexpectedly exercised a right of first offer” to buy the remaining 80-percent stake in the Sunset Tower that was previously owned by ER Hollywood, says TRD. Klein and an unnamed partner will pay approximately $95 million.
A source with knowledge of the transaction tells Curbed that Klein is personally invested in the Sunset Tower Hotel. He and then-business partner Peter Krulewitch bought a share of the property in 2004, paying $18.5 million. (ER Hollywood purchased an 80 percent stake, including Krulewitch's share, for $60 million in 2015, when the entire hotel was valued at $75 million.)
The hotel’s then-faded glamour was restored by Klein, who turned the Art Deco structure into a stylish space popular with celebrities.
Why then is it so surprising that he’d put in an offer on the hotel? One source told TRD, “They figured he was just some hotel guy, and wouldn’t have the cash to exercise his right. They didn’t think he could get that kind of money together so quickly.”
The sale is expected to close escrow in 90 days. Klein’s next step will be renovating the hotel’s terrace and guest rooms, but he’ll leave the Tower Bar as it is, says TRD. A source told Curbed that renovations should start within the next 12 months, and will include upgrading rooms in keeping with the classic style of the hotel.
The 81-room Sunset Tower Hotel opened in 1931, and designed by Leland Bryant, the architect behind some of the most beautiful vintage apartment buildings in the Los Angeles area, including the historic Colonial House in Hollywood. Throughout the years, it housed silver-screen luminaries such as John Wayne and Marilyn Monroe.
Correction: An earlier version of this article misstated how much of the tower Peter Krulewitch owned when he sold his stake to ER Hollywood in 2015.