Blackstone Group is to acquire a majority stake in Strategic Hotels and Resorts’ Del Coronado hotel in Southern California, US, to help restructure its debt.
Strategic Hotels formed a joint venture with Blackstone Real Estate Advisors and KSL Resorts to invest an undisclosed amount in converting a portion of its existing debt into equity.
The recapitalisation transaction values the hotel at approximately $590m. As part of the recapitalisation Deutsche Bank provided $425m in debt financing.
Following the transaction, Blackstone will become the general partner of the joint venture with a 60% stake, while Strategic Hotels and KSL Resorts will hold 34.3% and 5.7%, respectively.
The 670-room property, located on 28 acres of land near San Diego, was bought by Strategic Hotels for $745m in 2005.