Fortress Investment Group has agreed to buy the Rihga Royal Hotel Kyoto from Royal Hotel, Ltd. Fortress plans to invest significant capital in facilities and rooms. Fortress expects to close the acquisition in the first quarter of 2015.
Fortress Investment Group LLC (NYSE:FIG) today announced an agreement with the Royal Hotel, Ltd. (“Royal Hotel”) regarding the acquisition by a Fortress-managed fund of the Rihga Royal Hotel Kyoto, one of the region’s most prestigious hotels. Originally built in 1969, the hotel is a landmark in Kyoto with a deep tradition and convenient access to Kyoto Station. Working with Royal Hotel on a long-term basis, the Fortress fund (together with other Fortress affiliates, “Fortress”) plans to invest a significant amount of capital following the acquisition to enhance the current facilities and rooms to better meet the standards of a modern hotel, while retaining the historic feel and traditional elements that have enabled the Rihga Royal Hotel Kyoto to develop a loyal and distinguished clientele. Fortress expects the acquisition to close in the first quarter of 2015.
In addition to the planned capital expenditures, Fortress was selected by Royal Hotel due to its deep experience in the Japanese hospitality market, having acquired over 70 hotels in Japan over the past five years. Fortress has renovated or developed over 30 of these hotels, including the recently completed development of the Hotel MyStays Haneda and the Hotel MyStays Kanazawa, and a substantial nearly completed renovation of the Sheraton Grande Tokyo Bay Hotel next to Tokyo Disneyland. Fortress’s investments in Japan have been made through the firm’s Japan Opportunity Funds, whose investments benefit from management by a 34 person Tokyo-based real estate team headed by CIO Thomas Pulley.
Fortress is the sponsor of Invincible Investment Corporation (“Invincible”), a publicly-traded REIT (TSE: 8963) that is an active acquirer of hotels in Japan, with 23 acquisitions over the past year (including 22 hotels from Fortress-managed funds). Invincible currently has an approximate JPY135 billion market capitalization and based on share price appreciation is the top performing Japan-based REIT over the past two years. Fortress believes in the importance of the REIT market as a long-term holder of assets that can help channel the vast personal savings in Japan toward real estate investments.
Fortress Investment Group LLC is a leading, highly diversified global investment firm with $66.0 billion in assets under management as of September 30, 2014. Founded in 1998, Fortress manages assets on behalf of over 1,600 institutional clients and private investors worldwide across a range of private equity, credit, liquid hedge funds and traditional asset management strategies. Fortress is publicly traded on the New York Stock Exchange (NYSE: FIG). For additional information, please visit www.fortress.com.