Morgan Stanley Buys Luxury Hotels from CNL

Wall Street banker Morgan Stanley has negotiated a $6.6 billion (£3.34 billion) deal that gives it control over a chain of holiday resorts and luxury hotels across the United States, and also automatic control over one of the most famous golf courses in the country. Morgan Stanley Real Estate clinched the deal that would give it ownership of eight high-end resorts from CNL Hotels & Resorts. CNL has been operating a chain of 59 luxury hotels and resorts across the United States.

The complete deal includes an agreement between Morgan Stanley Real Estate and CNL to hand over the remaining 51 CNL hotels to the Ashford Hospitality Trust, an investment trust in the US. That deal was worth $2.4 billion. The remaining eight would go to Morgan Stanley, along with control of CNL.

Three of these eight hotels are currently trading under the Waldorf Astoria brand of Hilton. A Ritz-Carlton branded property, two JW Marriott properties, The Doral, and The Claremont, are the other properties that complete the portfolio that Morgan Stanley has acquired.

The Doral Golf Resort and Spa, located in Miami, has been host to PGA Tour tournaments from the past 40 years. The resort has five championship golf courses, and includes the Great White Course, designed by former world No 1 and two-time winner of the Open Championship Greg Norman. A round of 18 on this course can cost up to $250. The Claremont is a resort in California.

This purchase means Morgan Stanley can now boast a presence in four key American destination regions: Florida, California, Arizona, and Hawaii. The purchase from CNL comes at a time when the group is finalizing a deal to hand over 32 of its properties to its associate, Whitehall. As part of the deal, Morgan Stanley will also assume the outstanding debt of the company.

Morgan Stanley was founded as a mortgage brokerage firm in 1969, and has since then diversified into banking, lending, and investment. CNL Hotels & Resorts is a part of CNL Financial Group, and was formed in 1996 to handle investments in the hospitality sector. CNL Financial Group itself was formed in 1973. Started with a $5,000 loan, the company has grown into one of the biggest privately held property and financial groups in the US, with total assets worth $19 billion.