Lender reclaims high-rent West Hollywood multifamily property for condo conversion

KKR took control of the ultra-luxury apartment complex The Harland in a deed-in-lieu of foreclosure

Owners plan to convert The Harland multifamily complex in West Hollywood into condominiums. (CoStar)

By Brannon Boswell, Mark Heschmeyer

CoStar News

April 25, 2025 | 1:03 P.M.

This story has been updated to correct the seller.

A luxury apartment property in one of Los Angeles’ priciest neighborhoods is changing hands — and changing course.

KKR Real Estate Finance Trust, a New York-based real estate investment trust that originates and secures senior loans, has taken ownership of The Harland, a 37-unit ultra-luxury apartment building in West Hollywood, through a deed-in-lieu of foreclosure, according to property records.

KKR is owed $112.2 million on the property, according to public records. KKR said it plans to convert the apartments into for-sale condominiums by the end of summer to capitalize on stronger conditions in the high-end residential sales market.

The Harland, located at 702 N. Doheny Drive, features oversized two-story units, penthouses and townhouses averaging over 2,500 square feet each, private terraces, a rooftop lounge with city views, and amenities including a bowling alley. Average rents are about $18,000 per month, according to CoStar data.

But leasing at the property lagged expectations, contributing to financial strain as rising operational costs mounted and ultimately pushed the borrower, New York-based development firm Westbrook Partners, into default, according to KKR.

Originally envisioned as a condominium project, The Harland pivoted to luxury rentals before opening in 2019. The 137,544-square-foot building is currently about 27% vacant, according to CoStar data.

KKR had issued a $102 million first mortgage in 2022 to refinance the property, later modifying the loan to inject additional capital as leasing progressed more slowly than projected. Despite efforts including a borrower-funded escrow and a $5 million loan upsize, the building’s revenue fell short of stabilizing the asset, according to KKR.

On a recent earnings call, KKR Real Estate Finance Trust Chief Operating Officer Patrick Mattson said the company expects to lose about $25 million on the loan but is “proceeding on our condo execution strategy with unit closings anticipated for late summer.”

West Hollywood remains one of Greater Los Angeles’ most sought-after neighborhoods, known for its walkability and proximity to major retail and dining corridors along Santa Monica and Sunset boulevards. Typical home prices rank among the highest in the region, with an average sales price of $1,021 per square foot for residential properties, according to Homes.com. By comparison, luxury multifamily properties in West Hollywood have sold for an average of $524 per square foot, based on CoStar data.

The Harland's fate "illustrates the difficulties of leasing high-end properties even in the best locations,” said Ryan Patap, senior director of market analytics at CoStar for Los Angeles.