Goldman Sachs Acquired Senior Loan on Santa Monica Hotels

The firm purchased the $280 million loan after the luxury properties entered special servicing this summer.

Updated on Sept. 30, 2026 in Hospitality

Isometric editorial illustration of a grand hotel building next to ocean waves, representing hospitality real estate debt. — Goldman Sachs has acquired a $280 million senior loan tied to Santa Monica's Casa del Mar and Shutters on the Beach hotels. AI Illustration. Upload story photo >

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Goldman Sachs has acquired the $280 million senior loan tied to the iconic Casa del Mar and Shutters on the Beach hotels in Santa Monica. The purchase follows a period in special servicing sparked by a dispute over interest rate cap provisions and failed maturity extension conditions.

Why it matters

The acquisition highlights the financial complexities facing high-end hospitality assets in the current climate, specifically regarding interest rate volatility and debt service coverage ratios. The Slatkin brothers, who own the properties, aim to resolve the situation by paying off the senior debt with new financing.

The senior loan involves two luxury properties totaling 327 rooms, valued at $605 million in a 2024 appraisal. Currently, the debt service coverage ratio for the hotels remains below one.

The players

Goldman Sachs

This global financial institution provides investment banking, securities, and investment management services.

Slatkin brothers

These individuals are the owners and operators of the Casa del Mar and Shutters on the Beach hotels.

Citi Real Estate Funding

This is the division of Citigroup that originally provided the senior loan for the properties.

Morningstar Credit

This firm provides independent analysis and credit ratings for debt markets and securitized assets.

The details

Goldman Sachs secured the debt following a mutual agreement after the loan failed to meet maturity extension conditions in July 2026. The senior loan, originally originated by Citi Real Estate Funding, faced distress due to technical disagreements regarding interest rate caps.

The hotels received an appraisal of $605 million in 2024.
The senior loan entered special servicing during the summer of 2026.
Borrowers failed to meet maturity extension requirements in July 2026.
LNR reported the loan as matured and unpaid in August 2026.
Goldman Sachs finalized the acquisition of the senior loan on September 30, 2026.

Market Landscape

This acquisition reflects the ongoing market trend of institutional lenders increasing their stake in luxury hospitality assets that struggle with debt maturity defaults. It positions Goldman Sachs in a primary role to restructure the capital stack alongside the existing $120 million in mezzanine debt.

The change in debt ownership does not currently affect hotel operations, room bookings, or guest services at the properties. Guests can continue to book stays at both Casa del Mar and Shutters on the Beach as scheduled.

The takeaway

Commercial property owners often face significant hurdles when interest rate calculations and maturity extensions diverge from lender expectations. Securing replacement financing remains a critical move for property owners looking to maintain control of high-value assets during periods of debt distress.