Highgate assumes management of additional portfolios

The Lex Hotel in New York City is part of Trust Hospitality’s portfolio. Photo credit: Trust Hospitality

Real estate investment and hospitality management company Highgate has assumed management of Trust Hospitality’s portfolio of 22 hotels and resorts—approximately 3,100 rooms—throughout the U.S., Caribbean and Latin America. The portfolio includes a combination of hotels and resorts that are already open and that are in development.

This transaction increases Highgate’s footprint in the Caribbean and Latin America, and will enable the company to be the leading hotel manager in the region. Trust CEO Richard Millard and partner/head of development Michael Register will join Highgate to lead business development and owner relations efforts in the region.

As part of the Highgate platform, the Trust team expects to leverage their experience in the Caribbean and Latin America, and the benefits of Highgate’s scale, to significantly grow their presence across both branded and independent hotels.

“We are thrilled to be partnering with Richard and Michael as we continue to grow in key Caribbean and Latin America countries, and in the destination resort market broadly,” said Richard Russo, principal at Highgate. “Over the past few months we have accelerated the pace of Highgate’s growth through individual hotel additions, portfolios additions and strategic [mergers and acquisitions]. We will continue to pursue opportunities to collaborate with talented management teams who can benefit from integrating into the Highgate platform, and contribute to our objective of providing best-in-class services, innovated operating capabilities, and a compelling value proposition for our partners and key stakeholders.”

The Colony Compact

Late last month, Colony Capital entered into a definitive agreement to sell several of its hospitality portfolios to Highgate in a transaction valued at $2.8 billion, including $67.5 million of gross proceeds on a consolidated basis and the assumption of $2.7 billion in consolidated investment-level debt. The six portfolios consist of 22,676 rooms across 197 hotel properties.

As part of the transaction with Highgate, Colony will transfer five of the six portfolios held in the hospitality segment and an approximately 55 percent interest in the THL Portfolio held in the Other Equity and Debt segment. The sixth portfolio in the hospitality segment, the Inland portfolio, is under receivership and is excluded from the transaction. This transaction will reduce the company’s consolidated debt outstanding by $2.7 billion, including Colony Capital’s $2.3 billion pro-rata share.

The transaction is expected to close in the first quarter of 2021, subject to customary closing conditions and third-party approvals.

Highgate currently operates 160 hotels and resorts with more than 45,000 rooms worldwide.