UNITED STATES - California State Teachers Retirement System and Fillmore Capital Partners have invested capital in a deal which involves the acquisition of eight US luxury resort hotels by Morgan Stanley Real Estate.
CalSTRS has invested $300m (€221.3m) of equity while Fillmore Capital Partners made two investments in the deal, having originally invested $225m in the form of a bridging loan.
This was later replaced with $111.5m worth of acquisition financing followed by a further two tranches of debt worth $50m and $65.625m.
Ron Silva, president of Fillmore Capital, said opportunities to purchase similar hotel portfolios are rare.
"This transaction allows us to invest in a very high quality resort hotel portfolio. Deals that assemble these kinds of assets don't come around very often," said Silva.
Morgan Stanley acquired the 5,500-roomed resort portfolio at a cost of $4.2bn from CNL Hotels and Resorts.
Properties within the range include two in Phoenix - the Arizona Biltmore Resort & Spa in Phoenix and the JW Marriott Desert Ridge Resort & Spa in Phoenix - along with the Ritz-Carlton Orlando Grande Lakes and JW Marriott Orlando Grande Lakes in Orlando, Florida; two in California - the La Quinta 2 Resort & Club in Palm Springs and Claremont Resort & Spa in Berkeley as well as and Grand Wailea Resort Hotel & Spa in Maui, Hawaii.
Fillmore Capital made its investment for its commingled fund on behalf of the Fillmore East Fund, having raised $420.3m before closing in the fall of 2006.
Investors in the fully-invested fund include the Pennsylvania State Employees Retirement System, California Public Employees Retirement System and PSP Investments, the federal pension fund of Canada.
Fillimore's latest investment is the Fillmore West Fund, a structured financed which it is hoped will raise in the region of $600m-800m.
Assets from the fund will be used as mezzanine debt, preferred equity and equity transactions while a variety of property types will be considered.
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