Hilton Hotels Corp. (NYSE:HLT) and CNL Hospitality Corp. (“CNL”) today announced the formation of a partnership that will own four hotel properties: the 500-room Hilton Miami Airport in Miami; the 276-room Embassy Suites in Portland, Ore.; the 484-room Hilton Costa Mesa (California), and the 224-room Hilton Suites in Auburn Hills, Mich.
CNL, one of the lodging industry`s top acquirers of hotel properties, will own a preferred majority interest in the partnership. Hilton, one of the world`s leading hotel owners and operators, will operate the four hotels under long-term management agreements and retain a minority interest in the partnership.
The investment for the four hotels is approximately $235 million, which includes strategic refurbishment costs. Debt financing for the partnership is being provided by Morgan Stanley.
“This relationship with CNL represents a new and high quality capital partner for Hilton,” said Matthew J. Hart, executive vice president and chief financial officer for Hilton Hotels Corp. “Our participation in this venture enables us to own an equity interest in four outstanding hotel properties, while achieving the important goal of retaining long-term management contracts. It has been particularly gratifying to work closely with CNL and Morgan Stanley and we salute them for their flexibility and integrity in closing this important transaction.”
“Our new relationship with Hilton marks another milestone for CNL and fits squarely into our strategy of partnering with the industry`s top-tier lodging companies,” said Charlie Mueller, chief operating officer of CNL Hospitality Corp. “The addition of these four hotels expands our portfolio into proven, resilient markets and adds two exceptional full-service brands. CNL is pleased to be working alongside Hilton as we continue to expand our portfolio of superior hotel assets.”
CNL Hospitality Corp., the hotel industry investment and development subsidiary of CNL Financial Group Inc., currently owns or controls a geographically diverse portfolio of 49 hotels with 11,686 rooms in 20 states. With headquarters in Orlando, CNL Financial Group Inc. is one of the nation`s largest privately held real estate investment and finance companies.
CNL Financial Group Inc. and the entities it has formed have acquired more than $5.0 billion in assets, representing more than 3,000 properties in 49 states. The company and those entities focus on properties in the hospitality, retirement, corporate facility, community development, retail and restaurant sectors.