Buyout shop Blackstone Group has acquired a majority interest in San Diego’s Hotel del Coronado, Reuters reported. Blackstone will own 60% of the hotel. The deal reduces the hotel’s debt load by roughly a third, to $425 million. Strategic Hotels & Resorts, which will continue as the hotel’s asset manager, will have a 34.3% stake. KSL Resorts, the hotel’s operator, will hold 5.7%, Reuters wrote.
(Reuters) – Private equity firm Blackstone Group (BX.N) has taken a majority stake in San Diego’s historic Hotel del Coronado in a deal that will reduce the hotel’s debt load by about a third.
Blackstone will take a 60 percent ownership interest in the property. Strategic Hotels & Resorts (BEE.N), which will continue as the hotel’s asset manager, will have a 34.3 percent stake. KSL Resorts, the hotel’s operator, will hold 5.7 percent.
Blackstone, sitting on about $30 billion of capital, has been active in buying U.S. commercial real estate such as hotels, retail property and warehouse space from distressed owners and others who need cash.
The company is unusual in its peer group of private equity firms in having huge real estate assets. It is seeing a recovery in the office and hospitality sectors, and has said concerns about inflation are increasing the interest in real estate as an investment.
This transaction will reduce the debt on the Hotel del Coronado to $425 million.
A national landmark, the Hotel del Coronado opened in 1888 and has hosted presidents, royalty and Hollywood stars. (Reporting by Helen Chernikoff; Editing by Lisa Von Ahn)