In the ‘80s, Japanese investors snapped up trophy properties like Rockefeller Center in New York and Arco Towers in Los Angeles.
Now, a new wave of mergers flows from China. The latest stems from Anbang Insurance Group, intent on assembling a portfolio of trophy hotel properties worldwide, including the company controlling Montage Laguna Beach.
Anbang is negotiating with Blackstone Group’s Strategic Hotels & Resorts, Montage Laguna Beach managing director Rick Riess confirmed this week. “No transaction has been finalized nor do we have additional information to share at this time,” he said in a statement.
The Montage will continue to be operated by Montage Hotels & Resorts under an already-existing long-term management contract, Reiss said. “Our associates and guests will continue to enjoy business as usual going forward under the current leadership team.”
If the deal goes through, Anbang becomes the third owner of the ocean-front property in little more than a year.
Strategic Hotels & Resorts purchased Montage in 2015 for $360 million, but before the year was out sold itself to the New York private equity firm. Blackstone acquired the Montage and 16 other properties last December for $6 billion and is apparently negotiating to flip the properties to Anbang for $6.5 billion.
Besides the Montage, Blackstone’s portfolio of hotels includes three other Southern California properties: the Ritz-Carlton Laguna Niguel, the Hotel del Coronado near San Diego, and the Loews Santa Monica Beach.
“It’s unprecedented,” said hotel analyst Alan Reay, of Atlas Hospitality Group in Irvine. “There must be something else going on.”
Besides bidding for the Strategic hotels controlled by Blackstone, Anbang also covets Starwood Hotels and Resorts, competing against an offer from Marriot International. Both are hotel management companies, rather than property owners.
Just two years earlier, Anbang paid $1.95 billion for the New York Waldorf-Astoria hotel.
Reay speculates another deal may be in the works involving Anbang and Blackstone, whose Hilton holdings make it the world’s largest hotel owner.
He agreed that Montage guests should not expect to see changes due to an ownership change. Management of resort properties remains stable under long-term contracts of typically 25 years that pay 3 of gross revenue, Reay said. “It’s the reason big companies moved out of ownership; they get the revenue without the risk of ownership.”
With 248 rooms, three restaurants and high-touch service, Montage is one of the town’s largest employers. It remains managed by its founding operators, who opened the property in 2003 and now manage six Montage branded hotels.