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10-hotel deal includes Clearwater Beach Hilton
An equity fund continues its spree of acquiring high-end properties in Florida.
By MARK ALBRIGHT
Published February 2, 2006
Blackstone Group, which has been gobbling up hotels from debt-ridden chains, agreed to pay $367-million for 10 hotels in Florida, including one of the largest properties on Clearwater Beach.
Blackstone is buying the 426-room Hilton Clearwater Beach Resort along with six high-end properties on hurricane-ravaged Sanibel and Captiva islands near Fort Myers from MeriStar Hospitality Corp.
Included in the sale is the sprawling 579-room South Seas Island Resort which reopens this winter after a $140-million renovation. Sanibel/Captiva's lodging industry has been trying to get back on its feet since Hurricane Charley ripped through the barrier islands in 2004. Blackstone acquired five smaller Sanibel properties with a combined 427 rooms and the Dunes Golf and Tennis Club from MeriStar.
For Blackstone, a $12-billion private equity fund, the deal marks the latest in a multibillion-dollar buying binge that has consumed many top-end Florida properties owned by Boca Resorts and all of the Wyndham chain, LaQuinta Properties Inc., Prime Hospitality and Extended Stay America.
For MeriStar, the sale caps a selling spree and the chance to reduce debt, including its most expensive junk bond debt that is loaded down by 10.5 percent interest payments. MeriStar, which has shrunken its portfolio from 73 properties in 20 states to 58 in 19 states, said it will consider issuing dividends for the first time since 2002.
"With the closing of this transaction (by the end of the first quarter), our asset disposition program will be nearly complete," said Paul Whetsell, chairman and chief executive officer of Bethesda, Md.,-based MeriStar, which is the nation's third-largest hotel real estate investment trust behind Host Marriott and FelCor Lodging Trust. MeriStar shares closed at $9.98, down 28 cents after the sale was announced.
Mark Albright can be reached at albright@sptimes.com or 727 893-8252.
[Last modified February 2, 2006, 02:15:36]
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