Angelo, Gordon & Co. is opting for an early checkout from a recent hotel investment.
The real-estate private-equity firm has reached an agreement to sell 22 Value Place- branded hotels with 2,641 rooms for about $115 million, according to Value Place.
The deal will bring a fast profit for Angelo Gordon and its partner, Belvedere Capital Real Estate Partners, which paid about $75 million in 2010 to acquire the loan on the portfolio from Goldman Sachs, GS -0.96% say people familiar with the matter. The venture then took control of the properties, which were flying the Value Place flag.
Value Place liked the properties so much, it is the buyer of the portfolio from the Angelo Gordon group. The company owns, operates or franchises 185 extended-stay hotels that require at least a one-week stay. Prices range from about $169 a week for a studio room in south Texas to $699 a week in the fracking boomtown of Williston, N.D.
“We think we got some great sites in some great markets,” says Value Place chief executive Dan Weber. The purchase from Angelo Gordon is the company’s biggest purchase ever.
Hilton Cost Cutting
Gearing up for its hotly anticipated initial public offering, Hilton Worldwide has taken a key step: reducing its borrowing costs with the first leg of a $13.5 billion refinancing.
The hotel operator refinanced about $9.1 billion of debt last week, reducing its overall borrowing costs to an interest rate of around 4% from 4.5%, according to people familiar with the transaction.
The new debt, which replaces existing bonds, consists of a $7.6 billion seven-year bank loan and $1.5 billion of eight-year high-yield debt, these people said.
Hilton still is looking to sell about $3.5 billion in the commercial mortgage-back securities market, and to borrow another $525 million against its Waldorf Astoria hotel in Manhattan. In 2007, Blackstone Group BX -0.10% acquired Hilton in a deal that left Hilton with about $20 billion in debt.
The hotel operator said in a filing it plans to raise $1.25 billion, though analysts say Hilton could end up with an IPO closer to $2 billion. That offering could price as early as the end of the year, say people familiar with the process.
Miami condo developers increasingly are able to get construction loans to finance new projects. But it isn’t like the good old days.
Take Porsche Design Tower Miami, a 132-unit condo project being built by developer and car-racing enthusiast Gil Dezer in Sunny Isles Beach, Fla. Mr. Dezer, who has been financing construction with equity up until now, said in an interview that he has closed on a $214 million construction loan from a group of lenders led by Wells FargoWFC -0.95% & Co.
But Wells Fargo’s standards were high. Mr. Dezer said he has collected 30% down payments on 75% of the new building’s units, which have a total sellout value of $850 million. Before the downturn, banks were requiring lower down payments.
Mr. Dezer says that it helped that he and Wells Fargo parted on good terms on his last project: the Trump Towers Sunny Isles Beach, which ran into trouble during the downturn. Mr. Dezer had to cut prices to sell out that project and repay its $265 million loan.
“Around Miami there’s a lot of activity, but there are developers who the banks won’t talk to because of what happened in the last cycle,” Mr. Dezer said. “We’ve proved that in the bad times, we buckle down and we sell.”
A version of this article appeared September 25, 2013, on page C8 in the U.S. edition of The Wall Street Journal, with the headline: plots & ploys.