Regent Beverly Wilshire reported near sale: Hong Kong group said to be paying $100 million.

Hong Kong group said to be paying $100 million

The owners of the swanky Regent Beverly Wilshire Hotel in Beverly Hills are negotiating to sell the property, or the primary loan on the hotel, to a group of Hong Kong investors for about $100 million, according to sources.

The sources said the Hong Kong investors, headed by Polylinks International Ltd., were the winner of a sealed bid auction for the hotel conducted by Jones Lang Wootton USA Inc. Jones Lang Wootton is a worldwide real estate company with a local office in Los Angeles.

An executive at the Los Angeles office of Jones Lang Wootton said he could not confirm a deal is imminent. But he said the company could have an announcement on the hotel next month.

Jones Lang Wootton was hired by the owners of the hotel several months ago "to advise them on how to maximize their investment potential." At the time, the Jones Lang executive, Director of Investment Sales and Finance Michael Zietsman, said the sale of the property was a possibility.

The general manager of the 300-room, landmark property, John Indrieri, said as far as he knew the hotel is not for sale.

Major renovation outlay

The Regent Beverly, where nightly room rates are between $255 and $4,000, is owned by a group of primarily Japanese investors that operate under the name of Beverly Wilshire Hotel Co. The group has owned the hotel since 1987 and between 1988 and 1992 completed a renovation that cost $75 million to $100 million.

The owners have not been identified but sources said they are mainly institutional investors from Japan.

The sources, who did not want to be named, said Polylinks and the owners are in the "due diligence" phase of negotiations, which means the deal is close to being completed. Officials at the Vancouver, B.C., Canada, office of Polylinks did not return a phone call for comment.

The sources gave conflicting information that negotiations are under way to sell either the hotel or the primary loan on the property. But Zietsman indicated that if there is a deal, the hotel and not the primary loan would be sold.

Zietsman also categorically denied speculation the hotel has gone into foreclosure. "That's unequivocal. The hotel is not in foreclosure," he said.

Hefty loss predicted

Sources said the current owners of the hotel bought the Beverly Wilshire for about $100 million and then put up to another $100 million into a major renovation. If those figures are correct and the hotel is sold for about $100 million, that means the owners would lose a significant amount of money.

But sources said the Japanese owners are interested in selling to cut their losses and pull back from investments in the United States.

Records show that in 1992 the owners of the hotel refinanced $120 million in outstanding loans on the property. One loan is for $100 million with the Credit Bank of Japan and the second is for $20 million with Kyushu Leasing Service Co.

According to real estate records, the hotel's current assessed value is $107.2 million, down from $130.6 million in 1992.

The ornate hotel, built in 1930, is on Wilshire Boulevard where it meets Rodeo Drive in Beverly Hills. The land, at one of the world's most famous intersections, has an assessed value of $40.8 million and the building is valued at $66.3 million, according to the records.

The hotel is managed by Four Seasons Regent Hotels & Resorts.