Starwood Capital Group has agreed to buy a chain of hotels on behalf of its current opportunity fund, Starwood Distressed Opportunity Fund IX. The Greenwich, Connecticut- based real estate investment firm, led by Barry Sternlicht, has reached an agreement to purchase the InTown Suites hotel chain from a venture led by Kimco Realty for $735 million. The sale price includes the assumption of about $617 million of existing debt.
InTown Suites is owned by InTown Hospitality Investors, a joint venture in which Kimco holds a 75 percent interest. The InTown Suites portfolio is comprised of 138 extended-stay properties with approximately 18,000 rooms across 21 states predominantly located in the Southeast and Southwest, with concentrations in Texas, Georgia and Florida.
In a statement, Kimco said it expects the transaction to be completed in the first half of 2013. If and when the transaction is completed, the New Hyde Park, New York-based REIT has agreed to maintain $147.5 million in pre-existing guarantees of outstanding debt to be assumed by Starwood’s fund.
As of September, Starwood is understood to have raised $2 billion in equity for Fund IX. The opportunistic vehicle is focused predominantly on distressed opportunities in the US, although the firm also is believed to be eyeing Europe and Brazil for opportunities. A final close of nearly $3 billion is expected at the end of this year.