December 14 foreclosure auction set for Next Century Partner’s stake in the project
By Dolores Quintana
Next Century Partners, which is part of the Los Angeles company Woodbridge Capital Partners, will undergo a foreclosure on their stake in the Century Plaza Hotel redevelopment project in Century City, as reported by The Real Deal.com. On December 14, a uniform commercial code foreclosure auction for Next Century Partner’s stake in the project will take place.
The Century Plaza Hotel is located at 2025 Avenue of the Stars.
The stake is worth $2.5 billion, as reported by Co-Star’s news site and this specific kind of auction makes it possible for Next Century Partners to avoid a court appearance. Woodbridge Capital Partners originally purchased the hotel in June 2008 for almost $367 million. The purchase was co-financed by D.E. Shaw.
However, the project faced pushback from local residents who opposed the redevelopment of the hotel which would have cost billions of dollars and would have included a plan that called for the Plaza Hotel to be razed. Another issue was trying to find financing in an already difficult economy even prior to the pandemic.
David and Simon Reuben, who are businessmen who are philanthropists as well, gave the project $275 billion as reported by The Real Deal.com, JPMorgan Chase provided a senior load of $446 million, Colony Capital added mezzanine financing from an investment vehicle that they manage in the amount of $120 million and CMB Export LLC Regional Center lent $450 million in EB-5 financing to the project as reported by New Century.
The recently completed Century Plaza complex, completed in 2021, has 400 hotel rooms with an additional 331 residential units in two 44-story towers. 268 of the units are considered luxury housing, the hotel itself has been completely renovated and is 19 stories and the complex is completed by a 94,000 square foot area of retail stores and restaurants. The complex comes with 63 “high-end” units meant for sale on the top floors of the hotel as reported by Co-Star. Those units will be sold for prices between $1.8 and 11.8 million each.
Part of the issue with the new complex which caused the financial problems for Next Century and Woodbridge is the fact that the complex was opened right in the middle of the second year of the pandemic. During this time, home sales were down which adversely affected the new Century Plaza.
It is not known which of the creditors in this deal was responsible for setting the foreclosure in motion and the main group of creditors who are part of the project are not part of the public record. Motcomb Estates Limited is the entity for whom the foreclosure was coordinated and according to Co-Star is affiliated with the Reubens.
Alan Reay, president of Irvine hotel brokerage Atlas Hospitality Group, said according to Co-Star, that the auction should be popular among developers and real estate investors. He also cautioned, as quoted by CoStar, “In the development business, you’ve got to have super deep pockets. If you time it right, you make a fortune. If you miss it, you get wiped out.”