Stepping out of its traditional role as an investor in secondary fund interests, San Francisco-based Liquid Realty Partners has acquired a stake in a US lodging portfolio valued at $286 million (€213 million).
“We're not getting the cushion or benefit of diversification,” said Jeff Giller, a managing principal at Liquid and the firm's chief investment officer. “It's a much more active investment than a classic private equity secondary investment.”
Giller described the investment as a “hybrid,” adding that it gave the firm more control over the investment, much like a direct real estate acquisition. The plan sponsor is Cincinnati-based Eagle Realty Group, which put the portfolio together and is managing the co-investment.
Insurance company Western & Southern, which is affiliated with Eagle Realty, owned a controlling interest in the seven hotel properties, but decided to sell their stake in order to recapitalize the assets and realize some of the portfolio's value.
Giller said the properties are all stabilized and leaders in their respective markets. The firm declined to identify the properties, other than to say they are spread throughout the Midwest, South and Eastern US
“The operators are very strong at creating and driving value—mainly through operations,” he said. “They're all located in strong secondary markets,” with demand from adjacent office properties.
While he said the firm will continue to focus on acquiring fund interests, he said it wouldn't shy away from similar deals. “We are very open and capable of doing less mainstream transactions,” he said.
Since December 2006, Liquid has invested approximately $225 million in secondary transactions. In April, Liquid committed $82 million to two pan-European real estate funds. The investment was a “stapled” secondary transaction, which entails not only purchasing a secondary interest in a fund but also making a concurrent primary commitment to invest in a new fund being set up by the same fund manager.
In March, the firm acquired interests valued at $60 million in two real estate opportunity funds from an offshore seller. In both cases, the funds were not identified.
Fortress buys Florida real estate firm for $3.5bn
New York-based Fortress Investment Group has acquired Florida East Coast Industries in a $3.5-billion (€2.6 billion) transaction. The Jacksonville-based company has a commercial real estate concern, called Flagler Development Group, as well as a railroad business called Florida East Coast Railway. As part of the transaction, Fortress is paying stockholders a total of $84 per share of the New York Stock Exchange-listed company. Florida East Coast has around 8.6 million square feet of office and industrial space in the cities of Jacksonville and Orlando, as well as the counties of Palm Beach, Broward and Miami-Dade. The company also owns 846 acres of undeveloped land in Florida and has 1.9 million square feet of space under construction.
Investcorp acquires $450m hotel portfolio
The real estate arm of private investment firm Investcorp has acquired a 96 percent stake in the Procaccianti Hotel Portfolio for approximately $450 million (€331 million). The portfolio, which will continue to be managed by Procaccianti, is comprised of nine hotels in Illinois, Texas, Oklahoma and Florida under the Marriott, InterContinental, Hilton and Starwood banners.
Goldman bets on Nevada casino portfolio
Goldman Sachs' Whitehall Street has acquired four casinos from American Real Estate Properties, part of Carl Icahn's American Real Estate Partners, for $1.3 billion (€954 million). The portfolio includes the Stratosphere Casino Hotel & Tower, Arizona Charlie's Decatur and Arizona Charlie's Boulder, all in Las Vegas, and the Aquarius Casino Resort, which is located in Laughlin, Nevada. The acquisition also includes 17 acres of undeveloped land near the Stratosphere, which sports a 1,149-foot tower.
Apollo acquires hotel REIT for $700m
Apollo Real Estate Advisors has agreed to acquire Covington, Kentucky-based hotel REIT Eagle Hospitality Properties in a transaction reportedly valued at $700 million (€540 million), including debt and preferred equity. Under the terms of the deal, the New York-based private equity real estate firm and its operating partners, hotel management company Aimbridge Hospitality and hospitality advisory firm JF Capital, will acquire Eagle for $13.35 per share, a premium of 42 percent over the company's share price the day Eagle announced that it was exploring strategic alternatives.
RE buys Las Vegas golf course
Newport Beach, California-based CORE Realty Holdings has acquired suburban Las Vegas golf course The Revere Club from links management company Troon Golf for $28 million (€21 million). The club features two 18-hole courses spread over 400 acres south of Las Vegas. The acquisition also includes the club's 23,000-square-foot clubhouse. The acquisition of The Henderson, Nevada club is CORE's first investment in the golf sector, though the firm is embarking on a strategy to invest in golf clubs across the country.