Colony Capital reconsiders hotel portfolio in bid to shift from traditional properties

Tom Barrack-led firm, which defaulted on $3.2B in debt earlier this month, is reportedly looking to focus on digital properties

TRD New York /
May.May 28, 2020 09:45 AM
Colony Capital CEO Tom Barrack (Getty, iStock)

Colony Capital CEO Tom Barrack (Getty, iStock)

Colony Capital is weighing its options for its portfolio of hotels.

The Tom Barrack-led company has hired Moelis & Co to evaluate alternatives for the holdings, which include full-service, extended-stay and select-service hotels, according to Bloomberg.

Sources familiar with the matter told the publication that Colony was looking to move away from traditional commercial real estate to focus more on digital infrastructure properties.

Colony declined to comment on the report. Earlier this month, it said an advisor was helping the company “evaluate strategic and financial alternatives to maximize the value of its hospitality assets.”

It was also reported earlier this month that Colony had defaulted on $3.2 billion in loans backed by hotel and health care properties. The properties accounted for three quarters of Colony’s real estate balance sheet.

The hospitality industry has been one of the hardest hit by the coronavirus pandemic. With travel stalled, some hotels temporarily closed while others suffered from abysmal occupancy rates — though those fundamentals have started to recover.

In April, Barrack warned that the real estate industry was on the verge of collapse because the government is letting renters and homeowners skip payments due to the coronavirus.

He plans to step down as CEO later this year. [Bloomberg] — Sylvia Varnham O’Regan


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