Condor Hospitality is getting out of the hotel business — in fact, it appears it’s getting out of business altogether.
The trust is set to sell its hotel portfolio to affiliates of Blackstone Real Estate Partners for $305 million in an all-cash, no existing debt deal. The transaction is expected to close in the fourth quarter pending the approval of shareholders, according to Hotel Business.
This appears to be the beginning of the end for Condor. The company also announced its board of directors adopted a plan to liquidate and dissolve the business. Condor plans to pay outstanding liabilities after the transaction, before distributing net proceeds from the sale to shareholders. That plan is also contingent on the approval of company shareholders.
Condor has 15 hotels in its portfolio across eight states for a total of 1,908 rooms. The most prominents cities in the company’s portfolio include Austin (two hotels), Atlanta (two hotels), San Antonio (one hotel) and Jacksonville (one hotel). Condor’s corporate headquarters are in Bethesda, Maryland.
Blackstone retreated from the hotel industry right before the pandemic, focusing more of its efforts on rental housing, industrial buildings and the life sciences. As of the end of the second quarter, hospitality accounted for about 7 percent of the company’s real estate portfolio.
After doubling net income from $568 million to $1.3 billion in the second quarter year-over-year, Blackstone signaled earlier this year it was looking to get back to hospitality.
“We do think people will return to travel — individual and leisure travel first and over time corporate and group travel, so it’s a sector we like,” Blackstone president Jonathan Gray said on a July earnings call.
To that end, Blackstone and Starwood Capital Group in March struck a $6 billion deal to acquire Extended Stay America. Blackstone had previously acquired the hospitality company in 2004, only to turn around and sell it in 2007.
[Hotel Business] — Holden Walter-Warner