Strategic Hotels & Resorts, Inc., which owns the Montage resort in Laguna Beach and the Ritz Carlton Laguna Niguel in Dana Point as well as 15 other high-end properties, will be sold to New York-based Blackstone Group for $6 billion.
The deal announced Tuesday, Sept. 8, represents a quick flip in ownership for the ocean-front Montage, one of the crown jewels among Laguna Beach hotels and one of the town’s largest employers.
In January, the 250-room resort changed hands for the first time since opening 12 years ago, sold for $360 million to Strategic Hotels, based in Chicago. Based on its cost per room, the deal put Montage on par with the historic Waldorf Astoria, which sold for $1.95 billion last October or $1.4 million a room.
Under the earlier deal with Strategic Partners, Montage Hotels & Resorts retained management of its flagship Laguna resort, which includes three restaurants on a 30-acre bluff top rimmed by a public park overlooking the ocean.
That arrangement will continue under an already-existing long-term management contract, spokeswoman Kacey Spies-Bruno said in a statement this week. “Our associates and guests will continue to enjoy business as usual going forward under the current leadership team led by Managing Director Rick Riess,” she said.
Montage Hotels & Resorts, founded in 2002 by industry veteran Alan Fuerstman, altogether manages six Montage properties, including one in development in Santa Maria Bay in Los Cabos, Mexico.
The initial Montage sale came as hotel transactions in California for the first half of the year surpassed a 20-year record, with $4.4 billion in deals, says a recent report by Atlas Hospitality Group, an Irvine hotel broker.
Factors driving the transaction volume include the improving economy, cheap financing and investors looking for high-yielding assets or trading for similar properties, the report concludes.
For Blackstone, considered the world’s largest private equity investor with $333 billion under
management, the deal represents another move into the hospitality industry even as it capitalizes on investor hunger for hotels. Last year, Blackstone took public Hilton Worldwide Holdings and in May cut its stake by half. Real estate remains Blackstone’s most lucrative segment, according to the company’s second half results.
The new deal adds 17 properties to the Blackstone portfolio, including seven in California, including the Hotel Del Coronado and Westin St. Francis in San Francisco.
Buried in the 385-page purchase agreement between Montage and Strategic Holdings are a few little known nuggets: the source of its bottled water, Natura; its standup paddle boards, Paddle Board Bliss; and its roofer, Evans Roofing.