Deal for Historic San Diego Hotel Adds Blackstone, Cashes Out KKR.

Image via WikipediaBlackstone Group LP is in and Kohlberg Kravis Roberts & Co. is out as part of a recapitalization of the Hotel Del Coronado that establishes the historic beachfront hotel’s value at 20% less than it was during the boom.

The complex deal, which we first reported Jan. 28 and the owners formally outlined Monday, resolves the Del Coronado’s pressing matter of $630 million in debt that was to come due next week. As part of the deal, Blackstone has gained a 60% stake in the 787-room California property by contributing $100 million and converting into equity a small slice of the hotel’s mezzanine debt that it recently bought at a discount.

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Debt Due-Date Looms for Kerzner

Kerzner International Resorts Inc., owner of several high-end vacation spots, including the sprawling Atlantis resort in the Bahamas, has tapped a cadre of restructuring advisers to help rework nearly $3 billion in debt ahead of a looming repayment deadline later this year.

Kerzner recently enlisted advisers at law firm Kirkland & Ellis LLP, Goldman Sachs Group Inc. and Blackstone Group LP to determine how to restructure the debt, according to people familiar with the matter. About $2.6 billion of the debt, in the form of a senior mortgage, comes due in September.

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Hilton's Revival Boosts Blackstone

A year ago, Blackstone Group LP's real-estate group was peeling egg off its face.

Real-estate chief Jonathan Gray, once toasted as a member of Vanity Fair's "New Establishment," also seemed to have established the firm's most embarrassing deal. Blackstone's record $6 billion investment in the buyout of hotel chain Hilton Worldwide had lost 70% of its value.

How things have changed.

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Blackstone Buying Big Stake in historic Hotel Del Coronado

Blackstone Group LP is close to a deal with the owners of the historic Hotel Del Coronado near San Diego to restructure the beachfront hotel's $630 million of debt and become a major owner of the property, according to people familiar with the matter.

Under the terms of the pending deal, Blackstone and existing owners Strategic Hotels & Resorts Inc., Kohlberg Kravis Roberts & Co. and KSL Resorts will contribute enough capital to chop the hotel's debt load to $425 million from $630 million, these people said.

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A Hotel Mogul Gets a Reprieve

Kentucky hotelier Bill Yung III has found a solution to one of his debt problems just weeks after relinquishing control of 14 hotels to a lender, Blackstone Group LP.
Mr. Yung's Columbia Sussex Corp. has lined up loans from Barry Sternlicht's Starwood Capital Group totaling $206 million to replace debt that came due last July, the companies announced Tuesday. The deal means that 10 hotels pledged as collateral for those loans will remain with Columbia Sussex for another several years.
The loans from Starwood Capital include $192 million in a mortgage and mezzanine loan at an 8% interest rate. Those loans, maturing in January 2016, are tied to eight hotels. In addition, a $14 million, one-year bridge loan averaging a 12% interest rate is tied to two hotels.

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Blackstone hotels firm restructures $633mln debt

LONDON, Dec 13 (Reuters) - A European hotel company owned by Blackstone (BX.N) property funds has restructured 480 million euros ($633 million) of its debt, extending the maturity by five years to ride out a rough patch for the hotel industry.
The restructuring includes a new 150 million-euro mezzanine loan, fully placed with Morgan Stanley (MS.N) Real Estate Fund (MSREF) VII Global, a statement from Blackstone and its bankers Citi (C.N) and ING Real Estate Finance (ING.AS) said on Monday.

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Blackstone Said to Seize 14 Columbia Sussex Hotels It Sold Five Years Ago

Blackstone Group LP took ownership of 14 hotels it sold to Columbia Sussex Corp. five years ago after buying junior debt on the properties and seizing control, a person with direct knowledge of the transaction said.

Thirteen of the hotels will be managed by Interstate Hotels & Resorts Inc., according to a statement yesterday by Arlington, Virginia-based Interstate. They include properties under the Westin, Sheraton and Hilton brands.

Blackstone is betting that hotel real estate will recover after the credit crisis depressed values. The New York-based firm was part of a group that this year won a bankruptcy auction for hotel chain Extended Stay Inc., which it sold in 2007 to investors led by David Lichtenstein’s Lightstone Group LLC.

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Interstate to run Blackstone hotels

Arlington-based Interstate Hotels & Resorts, taken private by investors including China's largest hotel group this year, will manage more hotels owned by New York-based investment firm The Blackstone Group.

Interstate Hotels, will add 13 Blackstone-owned properties to its portfolio, including the Westin Washington D.C. City Center and the Sheraton Baltimore City Center Hotel.

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After a Rough Night, Hotel Investors Are Waking Up

IS this as bad as it gets? For two years, big investors watched the implosion of the lodging industry as hotel values plummeted more than 50 percent. Now as private equity giants like the Blackstone Group and entrepreneurs like Richard Branson are diving into the sector, others are starting to think it has finally hit bottom and may be bouncing back.

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Blackstone May Gain 14 Columbia Sussex Hotels After Acquiring Junior Debt

Blackstone Group LP bought the junior debt on 14 hotels owned by Columbia Sussex Corp. and may seize the properties from the company, according to two people with knowledge of the matter.

A $539 million mortgage on the real estate that comes due this month was turned over to a firm specializing in troubled commercial property loans due to imminent default, Fitch Ratings said in June. Blackstone has purchased portions of mezzanine debt tied to the mortgage that may allow it to take control of the hotels as soon as this month, said the people, who asked not to be identified because the talks are private.

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