An auction of the posh Viceroy L’Ermitage Beverly Hills hotel next week was canceled after potential buyers declined to bid more than the $100-million base price established by an unidentified “stalking horse” bidder last month, a federal representative said Thursday.
The sale to that bidder is expected to close in September, said Matthew Bordwin, who is conducting the transaction on behalf of a special master appointed by the U.S. District Court for the Central District of California.
The U.S. government moved to seize the hotel in 2016 from Malaysian financier Jho Low. Federal investigators said Low bought the hotel and other properties, including a Hollywood Hills mansion, with money embezzled from a Malaysian government-owned fund intended to spur economic development in the Southeast Asian country.
Low has denied any wrongdoing; he is a fugitive from Malaysian and U.S. authorities.
Since the L’Ermitage opened in 1975 on Burton Way, it has been known as a celebrity haunt, where luminaries such as Elizabeth Taylor, Richard Burton and Laurence Olivier have spent the night and dined in its fancy French restaurant.
A $37-million renovation completed in 2016 helped the hotel keep the coveted five-star rating from Forbes Travel Guide it has held since 2000. Its 116 rooms are all suites, including the 3,328-square-foot presidential suite that includes five balconies, a Steinway grand piano, a formal dining room, dens and a kitchen.
Would-be buyers of the famous inn were at first plentiful, said Bordwin, managing director of Keen-Summit Capital Partners.
“Hundreds of people were interested in the property,” he said, but ultimately all other bidders “couldn’t get over the $100-million number” and backed off in recent days from participating in the sale.
Auction rules said that the next bid had to be $104 million, which was apparently too rich for them, Bordwin said. “That’s a meaningful jump.”
Low bought the hotel for $46 million in 2010, when the market was still depressed after the Great Recession. The previous owner paid $68 million in 2000.
If the latest sale is approved by the court next month as expected, the identity of the stalking horse bidder selected to make the initial bid and set the floor for future bidders will be publicly revealed. Bordwin earlier described the bidder as “a savvy real estate investor with hospitality experience.”