Colony Capital has completed the sale of six hospitality portfolios to Highgate and an affiliate of Cerberus Capital Management for $2.8 billion.
The transaction concludes Colony Capital’s previously announced exit from the hospitality business. The six portfolios consist of 22,676 rooms across 197 hotel properties.
”The transaction resulted in aggregate gross proceeds to the company of $67.5 million and a reduction of consolidated investment-level debt of $2.7 billion, reflecting the assumption of underlying mortgage debt and other liabilities by Highgate and its affiliates and Cerberus,” said the company in a statement.
“We are excited to complete the exit of our hospitality business. When we announced this transaction last year, we targeted closing in the first quarter of 2021. Thanks to the hard work of David Schwarz and his team, as well as the folks at Highgate and Cerberus, we were able to deliver on another one of our commitments to shareholders,” said Marc Ganzi, President and CEO of Colony Capital.
“We remain focused on executing our digital transformation and this closing represents another positive step as we move to finish the mission,” he added.
“We appreciate the efforts by Marc, the Colony team, and the many other key stakeholders to bring this unique transaction to fruition. This investment marks an ongoing strategic commitment by Highgate to the select service and extended stay space. We are thrilled to welcome the many associates across these hotels to the Highgate team, and look forward to working together in navigating a highly dynamic market environment and delivering exceptional results and experiences for our guests,” said Mahmood Khimji, Co-Founder and Managing Principal of Highgate.
”This transaction provided us with the opportunity to invest in the recovery of the hospitality sector following an unprecedented market dislocation. Together, Cerberus and Highgate are committed to using our combined financial and operating expertise to help revitalize these hotel portfolios for the benefit of guests, employees, and the communities they serve,” said Tom Wagner, Head of North American Real Estate at Cerberus.