Police were called to the premises just after midnight on March 10 and "whilst making inquiries at the address discovered the deceased man".
The investigation into Gutnik's death, dubbed Operation Anniston, was headed by acting Detective Inspector Glenn Baldwin.
Yesterday he said since the death, police had been working "tirelessly" to identify the person responsible.
"Police can confirm that the two men were previously known to each other," said Baldwin.
Inside the brothel where Zion Gutnik was killed. Photo / SuppliedHe said he was "very proud of the determination and attention to detail undertaken" by the Operation Anniston Investigation team.
"The team have worked some very long days, over the past six weeks.
"Whilst this is a significant milestone in the investigation, there is still a lot of work ahead as the matter proceeds through the prosecution phase.
"We hope today's arrest provides the victim's family with some degree of reassurance."
Baldwin said Gutnik's family had been notified of the arrest, however they were still grieving and have asked for privacy during this difficult time.