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MetLife buys stake in trophy portfolio for $550m

The real estate investment arm of the largest US insurer has purchased a 25 percent stake in four high-profile hotel and retail properties from Silverpeak.

MetLife Real Estate Investors, the real estate platform of the largest insurer in the US, has acquired 25 percent stakes in four hotel and retail properties across the country from New York-based real estate investment firm Silverpeak Real Estate Partners for approximately $550 million. Silverpeak assumed its stakes through funds it took over following the bankruptcy of Lehman Brothers.
The properties in which MetLife is acquiring a stake include the Westin Times Square in Manhattan, the E-Walk retail complex located along Manhattan’s West 42nd Street, the Sheraton Chicago Hotel and Towers and the Swan and Dolphin hotels at Walt Disney World in Orlando. According to data provider Real Capital Analytics, MetLife will put down $225 million in cash and assume its share of the existing debt against the portfolio, which is now valued at more than $2.2 billion.
New York-based operator and developer Tishman Hotel & Realty also holds stakes in all four assets. In the Westin, E-Walk and Sheraton properties, Tishman will own the remaining 75 percent interest after MetLife closes the deal with Silverpeak. As MetLife previously owned 50 percent of the leasehold interest in the adjoining Swan and Dolphin resorts, this transaction will increase its interest to 75 percent, with Tishman holding the remaining 25 percent interest.
E-Walk, the only retail property in the portfolio, totals 177,394 square feet and includes Forty Second Street Cinemas as its major tenant. The 1,214-room Sheraton Chicago is the largest of the hotels in the deal, while the Westin Times Square comprises 873 rooms and the adjoining Swan and Dolphin resorts total 2,267 rooms. 
New York-based MetLife launched its real estate investment arm last fall. In August, the platform landed its first major partner, signing a three-year agreement on a commercial real estate debt venture with Atlanta-based SunTrust Banks.  In that partnership, MetLife sources and conducts due diligence on potential commercial real estate mortgage originations, while SunTrust provides financing for up to $5 billion in loans. MetLife currently holds $12.1 billion in real estate equity assets, including investments in office, apartment, retail, industrial and hotel properties worldwide, as well as $43.1 billion in commercial mortgages.