China’s largest life insurance company is the lead investor in a consortium of firms who will own a share of nearly 280 US hotel properties.
Greenwich, Connecticut-based Starwood Capital Group announced on Tuesday that the private investment firm will manage a multi-billion dollar real estate stake purchased by insurance giant China Life. According to a statement released by Starwood Capital, the $2 billion deal will make China Life the lead investor in a portfolio of US properties in 40 states and will include nearly 280 high-end hotels.
“We are honored to have been given the opportunity to serve as stewards of China Life’s capital, and thrilled to embark on a partnership that represents a first-of-its-kind relationship for our Firm,” Starwood Capital Group CEO Barry Sternlicht said in a statement announcing the new partnership. “With this select-service hotel portfolio, China Life has an efficient vehicle for investing in the United States economy as a whole—as these assets offer access to strong markets, strong cash-on-cash yields, scale and diversification. With our shared values and complementary investment approaches of our two organizations, we look forward to working with China Life on additional opportunities—across a wide range of real estate asset classes—in the years to come.”
Starwood Capital found itself perfectly situated to embark on the partnership. While US real estate is increasingly viewed as a uniquely stable investment opportunity for companies with large cash reserves across the globe, the firm chartered in 1991 proclaims “a core focus on global real estate.” The company boasts $34 billion of equity capital raised in its first 25 years and now manages more than $51 billion in mostly commercial real estate, but Director of Global Capital Raising Lanhee Yung says that China Life is bringing more than just an enormous cash infusion to the table.
“Throughout many months of collaboration, we have been incredibly impressed by the talent and commitment of the China Life team,” Lanhee said of the deal. “Given the skill and knowledge base of both organizations, we are excited to see the benefits that will accrue as our strategic partnership grows.”