Monday, February 7, 2011
The investment firm Blackstone Group LP is the new majority owner of the venerable Hotel del Coronado, it was announced today.
Blackstone will own 60 percent of the 123-year-old property, with Strategic Hotels & Resorts owning 34 percent. The company that by contract actually operates the hotel, KSL Resorts, will own 5.7 percent.
Strategic Hotels, which has owned the 757-room property since 2006, reportedly faced a deadline this week to repay $630 million in loans.
Laurence Geller, the CEO of Strategic Hotels, said the transaction will help the company significantly reduce its debt in the property.
"The Hotel del Coronado is an integral part of our portfolio and we welcome Blackstone into the partnership," Geller said. "Given the attractive growth characteristics of both the hotel and the San Diego market, we expect to further enhance the hotel's operations and overall value as it returns to, and potentially surpasses, previous peak performance."
Deutsche Bank provided $425 million in debt financing to re-capitalize the hotel, which was appraised at $590 million.
The hotel known locally as the "Hotel Del" has hosted 11 U.S. presidents and numerous celebrities over the years.