Blackstone has agreed to buy real estate investment trust Strategic Hotels & Resorts in a multi-billion-dollar deal. The deal is the latest move by the US private equity firm to expand its massive real estate portfolio.
Strategic Hotels & Resorts said on Tuesday that Blackstone’s real estate fund is set to buy the US luxury hotel owner in a deal worth $6 billion (5.4 billion euros), including outstanding debt.
The fund will pay $14.25 for each outstanding share of Strategic Hotels & Resorts, whose 17 properties are run by top hospitality chains – including Ritz-Carlton locations in California, the Fairmont Scottsdale in Arizona and the Four Seasons Resort in Jackson Hole, Wyoming.
The companies expect to complete the transaction by the first quarter of 2016.
Chicago-based Strategic Hotels & Resorts said in August it was exploring a sale, among other strategic alternatives, and had hired J.P. Morgan as a financial advisor.
“The board thoroughly considered various alternatives over the course of the past few years, and this all-cash offer from Blackstone creates significant stockholder value with a high degree of execution certainty,” said Strategic Hotels & Resorts CEO Raymond Gellein.
In it for the long term
Blackstone’s acquisition is the latest in the company’s buying spree expanding its real estate portfolio. The Wall Street Journal reported in April that Blackstone was able to fundraise a record $14.5 billion in less than four months to buy properties around the globe.
Now the company credits itself as being world’s largest real estate investor, with $92 billion of assets under management.
And it doesn’t appear as if the New York-based firm will lay off acquiring properties any time soon.
“As long-term investors in the lodging industry, we remain confident in the fundamentals of the sector despite recent market volatility,” said Tyler Henritze, co-head of US acquisitions for Blackstone Real Estate.
el/nz (Reuters, AP)