Chinese insurer to sell Montage Laguna Beach for $700M

Three months after it explored the potential sale of three luxury hotels that included the Montage Laguna Beach, a Chinese company has officially listed the properties for $1.3 billion.

Dajia Insurance Group has listed a trio of luxury hotels that includes the coastal Orange County resort and Four Seasons resorts in Jackson Hole, Wyoming, and Scottsdale, Arizona, the Wall Street Journal reported, citing unidentified sources.

BofA Securities Inc. and banking and brokerage firm Eastdil Secured are marketing the hotels on behalf of the seller.

Dajia is looking to raise $700 million from the Montage Laguna Beach, people familiar with the sales process told the Journal, a price that calculates to more than $2.7 million per room. It’s also hoping to raise $300 million each from sales of the two Four Seasons properties.

The state-owned Dajia, which took over most of the operations of the now-defunct Anbang Insurance Group, may seek to cash in on surging travel demand, according to Bloomberg, which reported a potential sale in June.

The hotels in the Dajia portfolio are well-known in the lodging industry for their high-end locations and the troubled saga surrounding their ownership.

The properties were transferred to Dajia when the Chinese government restructured Anbang following that company’s collapse.

The 258-room Craftsman-style Montage Laguna Beach at 30801 South Coast Highway spans 30 acres atop a seaside bluff within the artist colony. It has three restaurants, two pools and a 20,000-square-foot spa. Rooms cost between $1,390 and $11,050 a night, according to its website.

In 2019, Anbang agreed to sell a group of 15 hotels to South Korea’s Mirae Asset Management for $5.8 billion. That transaction, which included the three properties that Dajia may now sell, fell through in 2020 as the coronavirus pandemic crippled global the hotel industry.

Now Dajia, based in Beijing, is exploring a smaller transaction at a moment when lodging demand is surging in the U.S., especially at lavish resorts like the Laguna Beach, Jackson Hole and Scottsdale properties.

Rising interest rates and uncertainty in capital markets could make it harder for a buyer to line up financing for a Dajia deal. In May, Dajia halted efforts to refinance a separate hotel portfolio, citing market volatility.

Dajia refinanced the Laguna Beach, Jackson Hole and Scottsdale hotels last fall. In October, it lined up $340 million in CMBS debt for the property along Orange County’s coast.

Earlier in the month, it refinanced a portfolio of nine hotels with $1.8 billion in debt from Goldman Sachs and Bank of America. The Ritz-Carlton Laguna Niguel, a few miles from the Montage in Laguna Beach, was among those nine hotels.

Dajia also owns the Waldorf Astoria hotel on Manhattan’s Park Avenue, taking over the property after Anbang paid $1.95 billion for it in 2015, the biggest price tag ever for a stand-alone U.S. hotel.

The Chinese government’s China Insurance Security Fund owns 98.9 percent of Dajia. The rest is owned by China Petrochemical and SAIC Motor. Last year, China tried to sell the firm for as much as $5.2 billion.

Anbang got the Montage Laguna Beach Hotel when it purchased the Strategic Hotels & Resorts portfolio from Blackstone for $6.5 billion in 2016.

That was just a year before Chinese regulators went after the company, arresting former chairman Wu Xiaohui and charging him with fundraising fraud and embezzlement. He was sentenced to 18 years in prison in 2018 for perpetrating a $12 billion fraud scheme.

The government took over the company and has sold off assets or rolled them into Dajia.

— Dana Bartholomew

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