The 338-room property is owned by a pair of real estate investment firms that put it on the market last year.

The five-year-old Standard Hotel in Manhattan was built for about $240 million. ---Kevin Hagen for The Wall Street Journal

A marquee deal to sell the fashionable Standard High Line hotel in downtown Manhattan for $400 million has hit a serious snag.

The 338-room property is owned by a pair of real estate investment firms that put it on the market last year. It is operated by Standard International, a hotel management company owned by celebrated hotelier Andre Balazs and his partners.

Mr. Balazs and these same partners offered a price of about $1.2 million a room for the property, which would have been one of the highest prices ever paid for a hotel by that measure.

But after the buyers signed a contract in February, an Asia-based investor in the group changed his mind, and the buyers lost their down payment after failing to complete the acquisition, say people familiar with the matter.

The buying group seeks to revive its offer by bringing in a new partner, these people said. Meanwhile, the hotel’s owners, Dune Real Estate Partners and Greenfield Partners, are moving to refinance the debt on the property.

The owners spent about $240 million on the hotel, its restaurant and famed rooftop bar overlooking the Hudson River. The hotel straddles downtown’s elevated pedestrian park known as the High Line.

The Standard hotel’s issues come at a time when hotels are changing hands at record prices amid a rise in occupancy and daily room rates. The average price this year for a hotel sale has been $243,000 per room — a record level that is up 28% from last year, according to STR Analytics.

Mr. Balazs has also been on a roll with new hotels in New York and a recent hit in London with the Chiltern Firehouse. The trendy boutique hotel and restaurant in a former fire station has been so popular that one British blogger wrote there is “a waiting list for the waiting list.”

But if Standard International cannot reach a deal for the High Line hotel, it could raise questions about the future management of the Standard High Line. If a new buyer steps in down the road, the new owner might have the right to terminate Standard’s management contract.

The High Line property is one of Standard International’s most profitable of the company’s five hotels, including the Miami Beach Standard.

Last year, Mr. Balazs sold his majority interest in the Standard International, though he maintains a stake in the company and remains its chairman.

A spokeswoman for Standard International declined to comment.