NEW YORK CITY Blackstone Group LP has taken ownership of 14 Columbia Sussex Corp. after buying junior debt on the properties and seizing control. Blackstone sold all 14 properties to Columbia Sussex five years ago.
The transaction has not been formally announced, however Interstate Hotels & Resorts Inc. revealed earlier this week that Blackstone appointed it to manage 13 newly-acquired properties, without going into detail about how the properties were acquired. The portfolio includes six Westins, two Hiltons, two Sheratons, two Marriotts and a Wyndham, aggregating 5,466 guestrooms. The hotels are located in nine U.S. states, the District of Columbia and Canada.
Word of the transaction initially leaked two months ago, when Blackstone purchased portions of mezzanine debt tied to US$539 of Columbia Sussex’s mortgage debt that came due in October.
Blackstone had bought the junior debt on the Columbia Sussex hotels with the intention of seizing the properties, Bloomberg reports. Blackstone took over the hotels by deed in lieu of foreclosure, in which the borrower and lender agree to cancel the debt in exchange for handing over the property.
Prior to the Blackstone seizure, Crestview Hills, Kentucky-based Columbia Sussex owned or managed 66 hotels with about 23,000 guestrooms. Most of its hotels are branded by Marriott International, with Starwood Hotels & Resorts and Hilton Worldwide brands also prominent.
