Colony NorthStar To Sell $1.3B Foreclosed Hotel Portfolio
Los Angeles-based Colony NorthStar has foreclosed on a $1.3B hotel portfolio previously owned by a handful of owners, including a fund led by majority investor Goldman Sachs.
Colony took ownership of the portfolio through a consensual foreclosure due to the default on a $289M junior mezzanine loan. The REIT now owns a 55% interest in the portfolio of 148 limited-service hotels.
The remaining 45% of the portfolio is owned by third-party capital under Colony NorthStar’s management.
The properties were acquired by Whitehall Street Global Real Estate 2005 and Whitehall Street Global Employee Fund 2005, of which Goldman Sachs owns a controlling stake, in 2006. In 2013, the portfolio secured $1.35B in refinancing — $735M of which was commercial mortgage-backed securities, CoStar reports.
Colony NorthStar's predecessor firm originated the $289M junior mezzanine loan central to the foreclosure on the properties as part of that 2013 refinancing.
While the company remains optimistic about the prospects of the investment, Colony NorthStar Chief Financial Officer Darren Tangen said he was interested in ultimately selling the portfolio, saying the company does not consider it to be a core investment, CoStar reports.