Brookfield to Buy Watermark Lodging Trust for $3.8B

Watermark’s portfolio features 25 high-end properties with more than 8,100 rooms

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Watermark Lodging Trust is cashing out on its national high-end hotel portfolio. 

Brookfield will acquire all shares of common stock of Watermark for $6.768 per Class A share and $6.699 per Class T share in an all-cash transaction valued at $3.8 billion, including the assumption of debt and equity. The price is a premium of over 7.5 percent from the most recent Net Asset Values per share on December 31.

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The Watermark portfolio was built over a decade. It includes 25 properties with more than 8,100 rooms. Among them are the Ritz-Carlton Bacara in Santa Barbara, Calif.; the Ritz-Carlton Key in Miami; Hawks Cay Resort Florida Keys; the Ritz-Carlton in Fort Lauderdale; the Ritz-Carlton in San Francisco; the Westin Pasadena in Southern California; and in New York, the Holiday Inn Manhattan, and the Courtyard Times Square West.

“We are very pleased to reach this agreement with Brookfield, as it achieves our longer-term objective of a liquidity event, while providing our stockholders with an immediate and certain cash value,” Michael Medzigian, chairman and CEO of Watermark, said in a statement.

The proposed transaction has been unanimously approved by Watermark’s board and it is expected to close in the fourth quarter of 2022. 

“Hotels and resorts of this scale and quality are difficult to replicate,” said Lowell Baron, managing partner and CIO for Brookfield’s real estate group. “This portfolio is well positioned given its concentration in high barrier to entry coastal destinations, gateway cities and the Sun Belt.”

Brookfield currently has $700 billion of assets under management.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.