CNL Hotel & Resorts Inc., the nation’s second-largest hotel real estate investment trust, said Friday it agreed to be bought in two separate deals worth about $5.53 billion combined.

Orlando-based CNL said Morgan Stanley Real Estate would pay about $3.13 billion, or $20.50 per share, in cash. Including assumed debt, the total transaction is valued at $6.6 billion.

Morgan Stanley will receive a portfolio of eight luxury properties, including the Grand Wailea Resort Hotel & Spa in Maui, Hawaii; The Ritz-Carlton Orlando and The Doral Golf Resort & Spa in Doral, Fla.

“This acquisition is a unique opportunity to acquire eight top-quality resort properties diversified across key U.S. travel destinations,” said Michael Franco, managing director at Morgan Stanley Real Estate. “We believe that these types of luxury hotels are extremely hard to replicate and will exhibit excellent future growth from increased corporate group travel and leisure travelers seeking a one-of-a-kind experience.”

In the other sale, CNL said it would also sell 51 of its properties to Dallas-based Ashford Hospitality Trust Inc. for about $2.4 billion in cash immediately before closing the deal with Morgan Stanley Real Estate.

The Morgan Stanley acquisition is expected to close in the second quarter, subject to the approval of CNL’s shareholders and other customary closing conditions. The deal was unanimously approved by the boards of CNL, Morgan Stanley Real Estate and Ashford Hospitality.

“We believe our ability to acquire great real estate, particularly focused in the luxury and upper-upscale segments, along with our dedication to strong asset management, positioned the company for this opportunity to deliver value to our shareholders,” said Thomas J. Hutchison III, CNL’s chief executive.

The transaction is positive for publicly traded luxury hotels, said Citigroup analyst Joshua Attie in a research note. Overall, Attie said, the public demand and pricing for the hotel real estate market is “robust.”

CNL also agreed in December to sell off 32 properties to an affiliate of Whitehall Street Global Real Estate Limited Partnership 2005 for $405 million.

After the planned sale of some hotels to Whitehall, CNL would have about $6 billion in total assets with 59 hotels and resorts across the United States.

Other properties acquired in the sale to Morgan Stanley Real Estate include: The La Quinta Resort & Club in La Quinta, Calif.; The Claremont Resort & Spa in Berkeley, Calif.; and The Arizona Biltmore Resort & Spa and The JW Marriott Desert Ridge Resort & Spa, both in Phoenix.

CNL formed in 1996 and has spent the last decade acquiring upscale properties and forming relationships with major players in the hotel and resort industry, such as Walt Disney World, Marriott and Hilton.

On the New York Stock Exchange, Morgan Stanley shares closed up 29 cents, or about 0.36 percent, at $81.50 and Ashford Hospitality Trust closed up 33 cents, or about 2.7 percent, to $12.37.

Source: www.napavalleyregister.com

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