US-based Colony Capital has signed an agreement to sell six of its hospitality portfolios comprising 22,676 rooms across 197 hotel properties to real estate investment and hospitality management company Highgate for $2.8bn.

The transaction value includes $67.5m of gross proceeds on a consolidated basis in addition to the assumption of $2.7bn in consolidated investment-level debt.

As part of the deal, Colony will transfer five of the six portfolios held in the Hospitality segment and about 55% stake in the THL Portfolio held in the Other Equity and Debt segment.

The transaction excludes the Inland portfolio which is under receivership.

Colony Capital CEO Marc Ganzi said: “We are thrilled to be delivering on our commitment to dispose of non-core assets and harvest positive value for our hospitality business.

“With its strong track record, unique insights into the hospitality market and creative approach to hotel management, we are confident that Highgate is ideally suited to own and operate these properties.”

According to the company, the transaction is consistent with its intention to simplify its business profile to focus exclusively on digital infrastructure assets.

It is subject to customary closing conditions and third-party approvals and is expected to close in the first quarter of next year.

Highgate co-founder and managing principal Mahmood Khimji said: “Despite the unprecedented disruption in hospitality over the past six months, we remain bullish on the long-term secular trends in our industry, and look forward to partnering with the many employees, franchisors, lenders, and other important stakeholders across these portfolios as we work towards a successful recovery.”