Latest news: Starwood creating SPAC; Fosun explores resort sale; LA’s Cecil on market

Starwood Capital creates SPAC for 1, De Vere properties. Investment entities affiliated with Starwood Capital Group that own interests in a portfolio of hotels comprised of the 1 Hotels properties in Manhattan and Brooklyn, and the De Vere portfolio in the U.K., along with Jaws Mustang Acquisition Corp., a special purpose acquisition company, have signed a non-binding letter of intent for a potential business combination. Under the terms of the LOI, the combined public company with 10 properties would be listed on a national securities exchange. It is estimated that the initial portfolio earned $52 million of Net Operating Income at the property level for the year ended December 31, 2023, and the initial portfolio is projected to earn NOI at the property level of $62 million for the year ending December 31, 2024.  The 1 Hotel Brooklyn Bridge and the 1 Hotel Central Park will continue to be externally managed by SH Group Hotels & Residences and the De Vere portfolio will continue to be managed by its internal operational team.  It is expected that on an ongoing basis, the combined public company will seek to acquire additional hotel properties, including 1 Hotels properties. The Starwood Capital Entities and Jaws intend to finalize their definitive business combination agreement in the coming weeks and will announce additional details at that time.  

Fosun exploring sale of Atlantis Sanya resort. China-based Fosun Tourism Group said it was reviewing its business portfolio after a Reuters report that it was looking to sell its 1,300-plus-key Atlantis Sanya luxury resort in China as part of its efforts to reduce debt. The report did not place a valuation on the Atlantis Sanya, but in 2018 Fosun said it had invested 11 billion yen ($1.5 billion) in the resort. In February, a report said Fosun was exploring selling a minority stake in its Club Med business with a total valuation of $800 million.

LA’s Cecil on the market. The Cecil Hotel, a historic and notorious hotel in Los Angeles, is on the market. The 15-story, 601-key hotel is owned by 248 Haynes Hotel Associates, which is an entity tied to Richard Born, according to a report in The Real Deal. The asking price has not been disclosed. In 2013, the hotel made headlines because of the death of Canadian tourist Elisa Lam, who was found inside the water tank on the hotel’s roof. The case inspired a Netflix documentary and the hotel’s notoriety (it famously housed serial killers Jack Unterweger and Richard Ramirez) inspired a season of the TV show American Horror Story.

Sunray acquires four hotels in Canada. Toronto-based Sunray Group has purchased four hotels in Canada over the past few weeks for a total of $76.7 million, according to a report in RENX.ca. In two off-market deals on February 29, Sunray acquired the 236-key Sheraton Ottawa hotel for $43.2 million from Hong Kong-based Keck Seng Investments and the Fairfield Inn & Suites by Marriott and Quality Inn & Suites Bay Front (which combine for about 200 keys) in Sault Ste. Marie in Ontario for a combined $21 million from a locally owned company. In late January, Sunray acquired the 103-key Hampton Inn & Suites by Hilton Calgary Airport for $12.5 million from Triple One Properties Ltd. Kenny Gibson, president of Sunray, told RENX that the company is bullish on the hotel business in Canada and the hotel recovery has been stronger than anyone thought.

DHM to manage second international property. North Palm Beach, Florida-based Driftwood Hospitality Management (DHM) has assumed management operations for the 149-key Hilton Garden Inn San José City Mall in Alajuela, Costa Rica. The property, which opened in January, is Hilton’s 1,000^th Garden Inn property worldwide and marks DHM’s second international property.

Construction loan for Contender. Greenville, South Carolina-based Contender Development has secured $35.75 million in construction financing for the 137-key Residence Inn by Marriott in Ormand Beach, Florida. The hotel is scheduled to open in the fourth quarter of 2025. Phoenix-based Arriba Capital arranged the financing. 

Ennismore adds Mondrian in Romania. London-based Ennismore is partnering with Bucharest, Romania-based One United Properties to open the approximately 100-key Mondrian Bucharest in Bucharest. The Mondrian brand is a joint venture with Accor and already has 10 locations around the world with more in the pipeline.

Pavilions adds in Italy. Hong Kong-based The Pavilions Hotels & Resorts has signed The First Hotel Cortina. The 63-key The First Hotel Cortina is located on Corso Italia in the heart of Cortina d'Ampezzo and is scheduled to open in the fourth quarter of 2025. Cortina, along with Milano is hosting the 2026 Olympics and Paralympic Winter Games. The Pavilions Hotels & Resorts now has a total of 10 owned or managed hotels and resorts in operation across Asia and Europe, with two in the pipeline.

Accor rejoining CAC 40. Accor is set to rejoin the CAC 40, the benchmark index of the Paris stock exchange, on March 15. During COVID, Accor exited the CAC 40 in 2020 after being a member since its inception in 1987. The move back highlights the company’s record performance in 2023, with its EBITDA surpassing €1 billion for the first time in its history.

Splendid Hospitality secures loan. UK-based Splendid Hospitality Group has secured a £232 million club loan from OakNorth and HSBC to support its future capex work, including an extension of the 292-key Hilton London Bankside hotel in Southwark which will an additional 76 rooms. Splendid has 24 hotels in the UK, including hotels under brands from IHG, Accor, Hilton and Marriott.