Lenders Move to Foreclose on Hollywood's Godfrey Hotel Over $59 Million Debt

A default notice on the five-year-old, 220-room Cahuenga Boulevard hotel is the latest sign of strain for L.A. hotels facing maturing loans and soft tourism.

By Herald Staff · Nov. 9, 2026, 11:30 AM ET

Aerial view of the round, stacked Capitol Records Tower in Hollywood on a sunny day, surrounded by office buildings, parking lots, palm trees and the busy lanes of Vine Street, with the Hollywood Freeway along the top of the frame. — The Capitol Records Tower and the blocks around Hollywood and Vine, seen from above. A wave of new hotels went up in Hollywood before the pandemic, and several, including the Godfrey on nearby Cahuenga Boulevard, have since hit financial trouble. Photo: Carol M. Highsmith / Library of Congress / Wikimedia Commons, Public domain.

HOLLYWOOD — Lenders on the Godfrey Hotel Hollywood, a 220-room boutique hotel that opened only five years ago on Cahuenga Boulevard, have started foreclosure proceedings over $59.1 million in debt, the Los Angeles Business Journal reported Monday. It's the latest sign that the hotel building boom that remade Hollywood before the pandemic has run into a wall of maturing loans and soft tourism.

A notice of default recorded Oct. 8 says the borrower behind the seven-story hotel at 1400 N. Cahuenga Blvd. failed to pay off a loan that came due this year, according to the Business Journal's review of property records. The lender group, registered in Luxembourg and led by a fund of the investment manager AllianceBernstein, could sell the hotel's furniture and fixtures together with the building in a single foreclosure sale, the notice says. A notice of default is the first formal step toward a trustee's sale in California; it does not mean the hotel is closing, and Oxford Hotels & Resorts still operates the property, according to its website.

From Building Boom to Default

Chicago-based Oxford Capital Group, led by John Rutledge, bought the 20,000-square-foot site in 2016 for $16.5 million, at the height of a Hollywood hotel construction wave. The project took five years to finish. In 2022, Oxford's joint venture partner Goldman Sachs sold its stake to Related Fund Management, the investment arm of New York's Related Cos., in a deal that valued the hotel at $114 million, or about $518,000 a room. AllianceBernstein's lender group provided a $76.5 million variable-rate loan at the time, the Business Journal reported, and Oxford described the deal as a recapitalization of the hotel's construction debt.

Rutledge called that 2022 deal "a testament to the resilience and growth prospects of Los Angeles and the dynamism of the Hollywood submarket." It isn't clear whether Oxford kept an ownership stake. Oxford, Related and AllianceBernstein did not respond to the Business Journal's requests for comment.

The trouble isn't limited to Hollywood for Oxford. A lender sued in February to foreclose on the company's 221-room Godfrey Hotel in Chicago, and in 2024 Oxford handed four San Francisco hotels back to their lenders while staying on to run them, the Business Journal reported, citing The Real Deal.

A Rough Stretch for L.A. Hotels

The Godfrey is one of several large hotels that broke ground in Hollywood before 2020, and several have since changed hands. The former Tommie Hollywood on Selma Avenue was taken over by Marriott International and rebranded as Hollywood Volume in 2024, and the former Thompson Hollywood on Wilcox Avenue closed and reopened last year as the Hollywood Grande, also owned by Marriott.

Elsewhere in the city, a court placed the 231-room Residence Inn by Marriott LAX on West Century Boulevard into receivership in May after its owner was accused of owing about $45 million on a $53.5 million loan, The Real Deal reported. The borrower told the court it wanted to hand the property back to the lender.

Debt is a big part of the story. About 30% of U.S. hotel loans come due in 2026, according to the Mortgage Bankers Association, and many were written when rates were near 4%, Bisnow reported in August. Atlas Hospitality Group found a lender action, such as a foreclosure or notice of default, ahead of 36 of the 128 California hotel sales in the first half of the year. "LA has struggled from an economic recovery standpoint," JLL Hotels & Hospitality president Dan Peek told Bisnow. "The production business isn't back to the volume it was."

Demand hasn't bailed owners out either. The World Cup gave L.A. hotels only a 1% bump in occupancy this summer, and 72% of hotels surveyed by the Hotel Association of Los Angeles' research arm said the tournament hurt their 2026 finances, the Los Angeles Times reported in October. Downtown occupancy was 66% in June, down from 71% a year earlier, and international arrivals in June and July ran about 80,000 below 2024 levels. Six in 10 hoteliers in that survey said they expect short-term rentals to cut into their bookings and rates during the 2028 Olympics.

What Happens Next

Under California's nonjudicial foreclosure process, a notice of trustee's sale can't be recorded until at least three months after the notice of default, which leaves the owners time to pay off, refinance or sell the Godfrey before an auction. Recent California deals show the range of outcomes, from discounted sales to owners handing hotels back to lenders in a deed-in-lieu of foreclosure, as happened at the Edition West Hollywood in April, according to Bisnow.

For now, Oxford's hotel arm still runs the Godfrey. Whether it ends up with new owners, and at what price, will be one more measure of what investors think a Hollywood hotel is worth heading into the Olympic years.

Original reporting by The Los Angeles Herald, drawing on the Los Angeles Business Journal, The Real Deal, Bisnow and the Los Angeles Times, as linked above.