Colony Capital Inc. has completed the final sale and assignment of six hospitality portfolios to Highgate and an affiliate of Cerberus Capital Management L.P. The transaction concludes Colony Capital’s previously announced exit from the hospitality business.
Consistent with the original agreement, the transaction resulted in aggregate gross proceeds to Colony Capital 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.
“We are excited to complete the exit of our hospitality business,” said Marc Ganzi, president/CEO of Colony Capital. “When we announced this transaction last year, we targeted closing in the first quarter of 2021. Thanks to the hard work of [managing director] 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. We remain focused on executing our digital transformation and this closing represents another positive step as we move to finish the mission.”
Mahmood Khimji, cofounder/managing principal of Highgate, added, “Highgate is excited to conclude the acquisition of Colony Capital’s hospitality assets, in partnership with our friends at Cerberus. 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.”
Tom Wagner, head of North American real estate at Cerberus, added, “We are pleased to partner with Highgate to provide a tailored solution for a complex situation. 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.”