Hoteliers in 2022 saw movement from the Strategic Hotels & Resorts portfolio for the first time in nearly a year with the sale of three of its properties totaling approximately $1.2 billion.
China’s Dajia Insurance Group, the current owner of Strategic Hotels & Resorts and its hotels, sold the three resorts separately over the course of about two weeks in early November.
Analysts and industry-watchers don't know yet the fate of the portfolio's remaining 12 hotels, but here is a recap of the first three sales:
Dajia sold the 210-room Four Seasons Resort Scottsdale at Troon North for $267.8 million to hotel real estate investment trust Braemar Hotels & Resorts first on Nov. 1. It then sold the 125-room Four Seasons Resort & Residences in Jackson Hole, Wyoming for $315 million cash on Nov. 2.
Then, on Nov. 14, billionaire Tilman Fertitta acquired the 260-room Montage Laguna Beach Resort Hotel for an undisclosed amount, but CoStar data shows it sold for $641 million.
These sales represent the first sale of hotels from the Strategic Hotels portfolio since Anbang Insurance Group, the predecessor of Dajia, acquired the 15 hotels and resorts from Blackstone in 2016 for $5.5 billion.
Dajia had attempted to sell the full portfolio to South Korea’s Mirae Asset Financial Group, a multibillion-dollar financial services company, in 2019. The deal fell apart in 2020 over disclosure issues involving fraudulent ownership disputes on property titles as well as the closing of some hotels and layoffs of several thousand hotel employees due to the pandemic.
Dajia filed suit against Mirae for backing out of the deal, ultimately taking its claim to Delaware’s state supreme court, but the court justices sided with Mirae over their contract language requiring Dajia to continue operating the hotels according to past practices or receive Mirae’s consent before making significant changes.
Strategic Hotels & Resorts was a Chicago-based publicly traded hotel REIT founded in 1997 by Laurence Geller. It built a portfolio of iconic trophy hotels and resorts over the years. Near the end of 2015, Blackstone acquired Strategic Hotels and its then portfolio of 17 hotels for $6 billion, taking the company private.
Months later, Blackstone announced it would sell Strategic Hotels with 16 properties to China’s Anbang for $6.5 billion. The deal was amended after objections from the Committee on Foreign Investment in the United States over selling the Hotel del Coronado in San Diego because of its proximity to a large naval base with several installations. Blackstone then sold a portfolio of 15 properties to Anbang for $5.5 billion.