One of the world’s largest hospitality companies, Starwood Hotels & Resorts Worldwide, might soon be the object of the largest-ever takeover of a U.S. company by a Chinese firm.The Chinese government is in discussion with three companies – Shanghai Jin Jiang International Hotels; HNA, parent of Hainan Airlines; and China Investment Corp., a sovereign wealth fund – one of which will bid on the massive hotel chain.
The government plans to choose just one company to avoid a possible bidding war for Starwood, which owns over 1,200 properties worldwide and manages brands such Westin, W Hotels and St. Regis, unnamed sources told the Wall Street Journal.
It’s not yet clear what the bidders are willing to pay, but the amount is likely to exceed Starwood’s start-of-Tuesday valuation of $12 billion, the Journal reported.
The hotel firm’s stock price jumped 9.1 percent Tuesday to 74.81 on the news, its highest level since 2009. Starwood in April said it was exploring various options that included a sale or merger, largely as a reaction to having lagged behind competitors like Hilton and Marriott. Its longtime CEO, Frits van Paasschen, resigned in February and Starwood has been selling off hotel properties this year.
A potential deal would be the latest in a string of major hotel pickups by Chinese firms. Last year, the insurance giant Anbang bought the Waldorf-Astoria at 301 Park Avenue in New York’s Midtown for nearly $2 billion. And in February, Sunshine Insurance Group, bought the Baccarat Hotel at 20 West 53rd Street, then a Starwood property, paying $230 million.
“Chinese investors have been pretty aggressive in the hotel market over the last year or so,” said Lukas Hartwich, an analyst at Green Street Advisors LLC, told Bloomberg. “Starwood has some pretty powerful brands. It’s an attractive platform, especially if you don’t already own a platform with that kind of cachet.”
All three firms involved in a possible bid for Starwood are state-controlled or partly owned by the Chinese government.
Aloft South Beach — developed by Jason Halpern’s New York-based JMH Development, Madden Real Estate Ventures and Starwood Hotels & Resorts, announced Tuesday that it will open on May 28.
The hotel, at 2360 Collins Avenue, will have 235 rooms and will feature a Stephen Starr restaurant, Continental Miami.
“We’re excited about it. Obviously it’s an excellent location,” Halpern told The Real Deal. “We think that we’re building a unique product because we have been working with a powerful flag and brand, Starwood Hotels.”
Built on the site of the historic 1954 Ankara Motel, the project has aimed to preserve its Art Deco architecture, incorporating classic brick walls in the “historic wing,” refurbished Ankara Motel signage and the original pool shape. The hotel’s lobby will feature a series of black-and-white images of 1970s beach scenes and near the entrance, a large-scale aerial view photograph of models in vintage swimsuits.
Halpern, together with partner RCG, whose principal is Michael Boxer, bought the Aloft site in June 2005 for $12.85 million, with plans for a residential project. “When the recession hit we allowed the project to sit, and we went back and got approvals for what you now see, and started construction 15 months ago,” Halpern said.
Aloft South Beach is the first South Florida project for JMH, which is developing Three Hundred Collins, a 19-residence luxury condominium in the South of Fifth neighborhood of Miami Beach.
The five-story property, at 300 Collins Avenue, is being designed by Thomas Juul-Hansen, marking his first project in Miami. In New York, the famed designer-architect has designed the interiors of One57, and is currently the architect on 11 Beach Street in Tribeca, as well as 505 West 19th Street.
Sales for Three Hundred Collins launched in March, and eight units are reserved even before a sales office has opened, Halpern said. ONE Sotheby’s International Realty is the exclusive sales and marketing firm.
Plans call for units on floors two through five, with a lobby and amenity area on the first floor, and parking behind the building. One- to- four-bedroom units, including four two-story “duplex” condos and three penthouses, are priced from $1.2 million to $9 million. Construction is expected to begin in September, Halpern said.
After founding JMH Development in 2000, Halpern primarily focused on development projects in New York, before he turned his attention to South Florida. He was among the pioneers in Williamsburg, developing 184 Kent Avenue, a 337-unit rental building that was completed in 2010.
Already, a third South Florida project is in the works. JMH purchased 2901 Indian Creek Boulevard for $1.2 million in July 2013, and is planning a 30,000-square-foot residential development, Halpern said. The project will go before the Miami Beach Historic Preservation Board on May 12.
Pairing a tech-savvy, design-oriented product with the power of Starwood Hotels & Resorts’ global sales and marketing platform, including the Starwood Preferred Guest loyalty program, has helped Aloft grow its market share at record pace. It’s an approach that has redefined and reignited the mid-market hotel category the mid-market hotel category. With soaring satisfaction scores and increasing third-party recognition fueled by an international appeal that is driving global growth, there has never been a better time to build an Aloft.
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