Blackstone Group's real estate division has agreed to buy Strategic Hotels & Resorts for $6 billion.
The company made the announcement on Tuesday, September 8, reports The Real Deal, wherein Blackstone is set to acquire several hotel and resort properties in Strategic Hotels' real estate portfolio. The real estate investment trust owns the 44 story JW Marriott Essex House New York, the Fairmont in Chicago, the Intercontinental Hotel in Chicago and in Miami, among others. Strategic Hotels' also owns several Four Seasons hotels and resorts such as in Scottsdale, Jackson Hole, Austin, Silicon Valley and in Washington, D.C.
The Real Deal report also cited the 2006 sale of Strategic Hotels' luxury property at 160 Central Park South to the Dubai Investment Group for $424 million. However in 2012, the real estate investment trust reacquired the Central Park luxury hotel for $325 million.
Tyler Henritze, co-head of United States acquisitions for Blackstone Real estate, wrote in Tuesday's press release, that the company "remain[s] confident in the fundamentals of the sector despite recent market volatility." Meanwhile, Blackstone's recent purchase represents the firm's "renewed push into hospitality," states the Real Deal. In May of this year, the company reduced its stake in Hilton Worldwide Holdings below 50 percent. Blackstone also reportedly purchased three high end resorts in Orlando, Florida and Phoenix.
According to Reuters, Blackstone's $6 billion offer managed to push Strategic Hotels' company shared to as much as $14.10 Tuesday. This is slightly below the reported offer price of $14.25 per share. On the other hand, Blackstone Group's shares also rose to nearly 4.5 percent or $35.17 on Tuesday.
In the report, Reuters also mentioned how Blackstone has been on a "property buying spree." The company reportedly purchased various real estate from single family homes in the U.S. to distressed commercial properties in Europe. Meanwhile, the Blackstone and Strategic Hotels deal is expected to close by the first quarter of 2016.
