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Starwood Sells 14 Hotels For $1.2B, Seeks Buyer For $1B Apartment Portfolio

Starwood Capital is reportedly seeking offers for a portfolio of apartment buildings in the United States. Altogether, the properties could command $1B, according to Bloomberg, citing anonymous sources.

The Principal London, formerly known as Hotel Russell

Many of the properties are Class-B assets in Texas and Washington state that Starwood and Milestone Apartments REIT acquired via a takeover of Landmark Apartment Trust Inc. in 2016. 

Word of the potential sale came on the heels of another major sale by Starwood, one involving U.K. assets. French property group Foncière des Régions has entered the British market with the acquisition of 14 upmarket hotels from Starwood for £858M ($1.2B), Reuters reports.

The portfolio consists of full-service hotels with 2,638 keys and split across two distinct brands, Principal (12 hotels) and De Vere (two hotels). The properties occupy flagship locations in the U.K., including in London, Manchester, Edinburgh, Glasgow, Oxford, York and Leeds. Included in the portfolio are hotels The Principal London, formerly known as Hotel Russell, and The Principal Manchester, previously known as the Palace Hotel, two historic hotels in the U.K.

"Five years ago, we embarked on an investment strategy aimed at consolidating more than 50 hotels across four different U.K. hotel companies to form a leading platform," Starwood Capital Group Managing Director and Head of European Hotels Cody Bradshaw said. "With this sale to Foncière des Régions, we will have realized 35 asset disposals in total since our acquisition."

As part of the deal, InterContinental Hotels Group will sign long-term leases for 13 of those 14 hotels, subsequently rebranding and running the properties. 

Starwood, which currently has about $56B under management, is also a vigorous buyer. Last month it finished raising $7.55B for its 11th opportunistic real estate fund.