GREENWICH, CT—Continuing Chinese institutions' inroads into US hospitality, Starwood Capital Group said Tuesday it had sold a stake of about $2 billion in a select-service portfolio to China Life Insurance Co. Ltd. The portfolio spans 280 locations across 40 states and encompasses select-service brands of Hilton, Marriott, Intercontinental Hotel Group, Hyatt and Choice Hotels.

“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,” says Barry Sternlicht, chairman and CEO of Starwood Capital. Given the two companies' “shared values and complementary investment approaches,” he adds, “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.”

Bloomberg Business reported that the portfolio is valued at north of $3 billion. China Life will serve as both the anchor and leading investor for the portfolio alongside a group of sovereign wealth funds and other investors. Starwood Capital will continue managing the portfolio.

“Throughout many months of collaboration, we have been incredibly impressed by the talent and commitment of the China Life team,” says Lanhee Yung, managing director of global capital raising at Starwood Capital. “Given the skill and knowledge base of both organizations, we are excited to see the benefits that will accrue as our strategic partnership grows.”

Much of the portfolio came under Starwood Capital ownership with its 2014 acquisition of TMI Hospitality. The $1.2-billion deal gave Starwood Capital control of a 188-hotel portfolio, TMI's management company and its development platform.

Under China Insurance Regulatory Commission rules issued in '14, the nation's insurers can invest as much as 30% of total assets into real estate, including a maximum of 15% overseas. Months after the new rules were issued, Anbang Insurance Group established the first beachhead in US hospitality, paying just under $2 billion to acquire the iconic Waldorf Astoria in Midtown Manhattan.

Instant Insights /

Chinese Insurer Takes Stake in 40-State Hotel Portfolio

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