September 20, 2012
In December 2010, Cornerstone Real Estate Advisors acquired the Embassy Suites hotel from HEI Hospitality, through its Cornerstone Hotel Income & Equity Fund II (CHIEF II). Cornerstone retained HEI as the hotel’s operator despite accusations of labor law violations.
The intensity of the Embassy Suites boycott and labor dispute raised fiduciary concerns for Cornerstone’s pension fund investor, the Los Angeles County Employees Retirement Association (LACERA). In May, Cornerstone was asked by the Board of LACERA to explain why it was unable to resolve the labor dispute which is costing their hotel money, and it reiterated its faith in HEI, while noting: “What’s a little different here is its duration and just the aggressiveness of the dispute.” After LACERA’s Board gave Cornerstone 90 days to resolve the dispute, Cornerstone decided to oust HEI as a hotel operator, and a new company began operating the property on September 1, 2012. Read more here: Cornerstone Fires HEI