Barings sells seven US hotels for $650m

Date: February 2018

Location: Newport Rhode Island, Chicago, Boston, Washington, Seattle and Phoenix metropolitan areas.

Name: Newport Marriott (US$88.46m), Motif Seattle (US$145m) – and others

No. of Keys: Newport Marriott: 312; Motif Seatlle: 319;

Seller: Mass Mutual, through it’s asset management arm, Barings, has sold seven US hotels to a Hong Kong-based investment management company for $650m (€733.6m).

Barings, which sold the asset on behalf of an international financial services company, said it is being retained by the new owner as asset manager for the hotel portfolio on a long-term basis.

All hotel operation will continue as usual with no change in current hotel management companies or personnel, Barings added.

Scott Brown, the global head of real estate at Barings, said: “This transaction reflects the value Barings is able to provide to clients through our depth, global reach and our ability to source and manage real estate investment opportunities and serve clients’ capital needs worldwide.

“We are delighted to welcome a significant, sophisticated and experienced client to the Barings Real Estate platform and will utilize our deep knowledge in managing hospitality investments to maximize the potential of this group of quality assets for our new partner.”

Buyer: Junson Capital from Hong Kong, who in September 2016 acquired the 378 room DoubleTree Hilton in London’s Docklands (it’s first UK hotel buy) for around £80m from HIG affiliate Bayside Capital.

Junson is headed up by Cai Kui, China’s 38th richest man with an estimated net worth of $5.6 billion, earned his fortune after co-founding Longfor with his then-wife Wu Yajun in the central Chinese city Chongqing in 1993.

Price: US$650m

THPT Comment: Interestingly just a year ago (January 2017) Barings announced that Lambis Pahiyiannakis, assistant vice-president Hotel Group, has relocated to Barings Real Estate Advisers‘ London office as part of the company’s strategy to extend its hotels investment platform in Europe. The hotel team manages $2.3bn of hotels and equity investments…..is this a reverse in strategy or simply freeing up some cash to further expand into hotels?

At the time, Charles Weeks, Head of Real Estate Europe said: “The European hospitality sector is an area which we believe will see an increasing amount of institutional activity and having built a successful hotels investment and management platform in the U.S., we are looking to establish a similar operation in Europe.”

Encouraging to see Junson Capital continue its foray into hotels on both sides of the Atlantic