Oaktree, Trinity form $3bn global hotel JV

Four months after teaming up on their first deal, the firms will invest in value-added hotels in Hawaii, California, Mexico and Japan.

Oaktree Capital Management and Trinity Investments are expanding their partnership with a $3 billion hotel joint venture announced Monday.

Los Angeles-based Oaktree and Honolulu, Hawaii-based Trinity will invest in value-added hotels in Hawaii, California, Mexico and Japan, markets where Trinity has previously invested. The JV will invest alongside institutional investors and high-net-worth individuals.

“This partnership aligns with Oaktree’s strategy to invest with experienced partners in key strategic markets,” Oaktree managing director Ben Bianchi said in Monday’s statement. “We are confident that Trinity’s investment acumen and market knowledge coupled with our expertise will result in a highly attractive portfolio of hotel investments.”

Trinity is overseeing the JV and will be responsible for acquisitions and asset management. Further terms of the partnership were not disclosed, and the firms declined to comment.

“Expanding our relationship with Oaktree provides us with additional capital to increase our scale in our core markets,” Trinity chief executive Sean Hehir said.

Oaktree and Trinity formed a JV in April to buy the leasehold interest in the Westin Maui Resort & Spa, a 759-room luxury hotel in Hawaii, from Starwood Hotels & Resorts for $317 million, according to an announcement at the time.

Oaktree launched its value-added real estate strategy last year and had raised $615 million for the platform as of June 30, according to its second-quarter earnings. About 40 percent of that capital had been invested, though the strategy is too recent for the firm to report a return rate.

The firm managed $99 billion across its strategies as of June 30. In hospitality, Oaktree’s most recent publicly-available transaction was the June 2016 purchase of the Hilton Washington. The firm bought the 1,070-unit hotel in Washington, DC, for $305.5 million in a joint venture with Clearview Hotel Capital, according to data provider Real Capital Analytics.