Editor's Note: Some linked articles may be behind subscription paywalls.
1. Nine-property Strategic Hotels portfolio refinanced for $1.58 billion
Nine luxury hotels in what's now a 12-hotel portfolio for Strategic Hotels & Resorts were refinanced through CMBS debt, CoStar News reports.
The properties included in the refinancing are:
- Ritz-Carlton Laguna Niguel in Dana Point, California.
- Ritz-Carlton Half Moon Bay in Northern California.
- Westin St. Francis in San Francisco.
- JW Marriott Essex House in New York City.
- Regent Santa Monica Beach in California.
- InterContinental Miami.
- InterContinental Chicago.
- Fairmont Scottsdale Princess in Scottsdale, Arizona.
- Four Seasons Washington, D.C.
Collectively, the refinanced hotels represent 4,957 rooms.
Strategic Hotels used to operate as a publicly traded hotel real estate investment trust before it was purchased and taken private by a Chinese company then known as Anbang Insurance Group for $6.5 billion in 2016. Anbang, which also put in a bid for Starwood Hotels & Resorts Worldwide before Marriott International acquired that company, was eventually reorganized as Dajia Insurance Group when the Chinese government made widescale crackdowns on how companies handled foreign investments.
Since that point, Dajia has sold off parts of the Strategic portfolio, including three deals in 2022: the $267.8 million sale of the Four Seasons Resort Scottsdale at Troon North to Braemar Hotels & Resorts; the $315 million sale of the Four Seasons Resort & Residences in Jackson Hole, Wyoming, to Host Hotels & Resorts; and the $641 million sale of the Montage Laguna Beach Resort Beach to billionaire Tilman Fertitta.
Morningstar DBRS reported $1.3 billion of the loans proceeds will repay existing debt and $284 million in cash will return to Strategic.
Chicago-based Strategic Hotels & Resorts secured the financing from Bank of America and German American Capital, according to analysis of the deal by bond rating firms Morningstar DBRS and Moody’s Investors Service, CoStar News' Mark Heschmeyer reports.
Two properties, the 167-room Regent Santa Monica Beach in California and the 1,189-room Westin St. Francis in San Francisco, have either negative net cash flow over the 12 months ended June 30 or a negative budgeted net cash flow for 2025, according to Morningstar. The Regent Santa Monica Beach has been closed for construction since March 2023 and is expected to open for business this month.
2. Authorities assess hurricane damage as millions remain without power
The official death toll from Hurricane Milton has increased to at least 13, mostly on Florida's eastern coast that was hit by tornadoes. Although Florida's building codes and storm preparations likely limited damages compared to what could've happened, cleanup from the storm is projected to take "weeks or months," The New York Times reports. At this point, more than 2 million people remain without power, down from the peak of 3.4 million recorded on Thursday.
Several commercial ports have reopened in Florida, Georgia and South Carolina, however, and officials believe early and repeated warnings of the dangers of the storm helped mitigate injuries and deaths from the storm.
“Locals took this one more seriously,” Port Charlotte, Florida, resident Jennifer Rogers told the newspaper.
3. Hotel investors expect deals to accelerate
Experts speaking at The Lodging Conference in Phoenix this week remain bullish about the outlook for deals in 2025, HNN's Bryan Wroten reports.
Kate Henriksen, co-chief investment officer at RLJ Lodging Trust, said the transaction market is reaching a point where it's readjusted after a flurry of activity in the immediate aftermath of the pandemic followed by a slowdown induced by debt markets.
"This has been kind of the reset," she said during the "Owners, Investors and Operators: Opportunities, Challenges & Trends" session. "And now, going into 2025, I think we're going to start into a new cycle."
4. Investors expecting massive wave of stimulus in China
With announcements expected from Chinese government officials this weekend, investors are hopeful for a new wave of wide-ranging economic stimulus, CNBC reports. Alpine Macro Chief Global Strategist Chen Zhao told the news outlet that the government has recognized it is staring down a "whatever it takes moment" to help its struggling economy recovery.
Ahead of the Golden Week holiday, officials put out a first wave of stimulus including interest rate cuts and policy changes aimed at simplifying the path to home ownership.
Most economists expect some sort of additional stimulus this weekend, but there are many differing views on its size as well as the priorities of the package. Some have floated a figure between two and three trillion yuan (the equivalent of $282.8 billion to $424.2 billion), while others have suggested 10 trillion yuan ($1.4 trillion).
5. New York's migrant housing in hotels could extend through 2025
The New York Post reports there are signs that New York City's program of housing thousands of migrants in hotels could continue through the end of 2025, although some conservative groups are pushing back against that idea. The newspaper reports the city is spending $2.3 billion on the program this year across 150 hotels and is seeking 14,000 rooms for next year.
“The New York City Department of Homeless Services is seeking to continue the City Sanctuary Facility program by procuring a vendor who can assist in acquiring the use of large scale commercial hotels and hotel management services to help address the current emergency,” a filing from the agency reads.
(Corrected on Oct. 15 to specify the full name of the Regent Santa Monica Beach in the first item.)