CHARLOTTE, NC—Barings said Monday it had arranged the sale of a seven-hotel portfolio on behalf of its client, a major international financial services company, to a Hong Kong-based investment management company. Seller and buyer were not identified; however, reports by Bloomberg News and other media outlets indicated that the buyer in the $650-million sale was Hong Kong-based Junson Capital and that the seller was MassMutual, which owned the properties through Barings, its asset management arm. A MassMutual spokesman told GlobeSt.com the firm has no comment.
Barings said the portfolio comprised seven upper-upscale business class hotels in the Chicago, Boston, Washington, DC, Seattle and Phoenix metropolitan areas. Industry data identify two of the properties as the Motif Seattle, which traded for $132.8 million, and the Scottsdale Resort at McCormick Ranch, which fetched approximately $61.6 million. Similar in room count, the two properties sold for $416,301 and $188,993 per unit, respectively.
The new ownership plans to maintain continuity. Barings is being retained as asset manager for the hotel portfolio on a long-term basis, and all hotel operation will continue with no change in current hotel management companies or personnel.
Barings arranged the sale directly without a broker, and also played a key role in securing private financing for the portfolio through three separate lenders. “As an asset class, commercial real estate equity continues to attract investors seeking risk-adjusted returns, and assuming an adequate hold period, well-located quality hotel properties also represent a good portfolio diversifier,” says Michael Zammitti, head of US real estate equity at Barings.
Junson is a family office for Cai Kui, co-founder of Longfor Properties. It has invested in the hotel sector outside of China before: in August 2016, Junson bought the 378-key Doubletree by Hilton in London's Docklands area for a reported £80 million (approximately US$112 million). Colliers International said at the time that the deal was believed to be the first major hotel transaction by an overseas buyer in London since the UK's referendum earlier that summer to leave the European Union.
Bloomberg News, which attributed the deal to Junson and MassMutal through a source said to be familiar with the transaction, reported last week that the sale showed how Chinese investors with offshore capital remain able to pursue real estate acquisitions around the world, even after the Chinese government placed new restrictions on buying trophy assets including overseas hotels, movie studios and sports teams. It adds to the $11.7 billion of announced hotel acquisitions by Asian companies over the past 12 months, according to data compiled by Bloomberg.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
