With Blackstone Group's massive acquisition of Strategic Hotels & Resorts Inc, the nation's largest landlord has added one of San Diego's most luxurious hotels to its portfolio. For the second time.
The deal with Strategic, which owns Hotel Del Coronado and 16 other high-end hotels, involves some nearly 8,000 hotel rooms in such resorts as Ritz-Carlton Laguna Niguel in Dana Point and three Four Seasons hotels in Silicon Valley, Washington, DC, and Scottsdale, AZ. As for the Hotel Del Coronado, the REIT sold its interest in the 757-room lodging to Strategic back in 2014 for $210M, or more than $1M per key. That was after Blackstone invested $100M in it in 2011 to save the famed hotel from default.
Strategic CEO Raymond "Rip" Gellein told stockholders the Blackstone deal is a culmination of various "strategic alternatives" the firm had been eyeing for the past few years. "This all-cash offer from Blackstone creates significant stockholder value with a high degree of execution certainty," he stated. This isn't Strategic's first sale this year either. The firm sold its 417-room Hyatt Regency La Jolla at Aventine to a JV involving Walton Street Capital and JMA Ventures for $118M.
Hotel Del Coronado was the setting for the Jack Lemmon/Tony Curtis/Marilyn Monroe classic comedy Some Like It Hot. The hotel still has a $285M outstanding CMBS loan that matures this year, one of the largest CMBS loans on any San Diego property.
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