Starwood Capital Group ("Starwood Capital"), a global private investment firm focused on real estate and energy investments, today announced it has originated a £1.8bn Term Loan as Mandated Lead Arrangers to Blackstone Capital Partners ("BCP") and Blackstone Real Estate Partners ("BREP") for the acquisition of Bourne Leisure, a premier UK holiday company.
Starwood Capital will hold £720m split evenly between two of its investment vehicles, Starwood Real Estate Income Trust, Inc. ("SREIT"), a non-traded REIT managed by Starwood REIT Advisors, L.L.C., a subsidiary of Starwood Capital, and Starwood Property Trust, Inc. (NYSE: STWD).
Bourne Leisure is the largest provider of caravan holidays and holiday home ownership in the U.K., operating three well-known brands — Haven, Butlin's and Warner Leisure Hotels. The company employs over 16,000 team members, hosts 25,000 holiday home owners, and attracts 4.5 million guests to 56 sites across the UK every year.
"Starwood Capital has over 20 years of experience investing in Europe and we believe in the long-term growth opportunities in the UK. We expect to see a resurgence in the UK domestic leisure sector in the post-COVID lock down environment and are thrilled to participate in an investment that not only benefits our investors, but also supports the recovery of a COVID-impacted industry and the local economies that are tied to it," said Lorcain Egan, Managing Director – Head of International Loan Originations, at Starwood Capital. "We are also pleased to provide this financing to Blackstone, who has a proven investment track record in the wider hospitality, travel and leisure sectors. This transaction is in line with our strategy of providing large loan financings across major real estate asset classes."
This will be the first European investment, and the first debt investment into SREIT. "We are very excited about this investment for SREIT because it provides strong risk adjusted returns, geographic diversification and steady, predictable cash flows for our investors. For example, site fees from Haven's caravan business, something equivalent to recreational vehicle parks in the U.S., represent approximately 50% of the value and provide that stable, recurring income stream we look for," said John McCarthy, CEO of SREIT.
"Starwood Property Trust is pleased to participate in this investment alongside SREIT. As the largest Commercial Mortgage REIT in the U.S, with over $36B of loans originated since our inception, Starwood Property Trust is optimally positioned to source and underwriting large floating-rate loans to high quality borrowers. We believe this loan, to a repeat sponsor, represents a very attractive risk-adjusted return for our shareholders," stated Jeffrey DiModica, President of Starwood Property Trust.
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