USAA Seeds Hotel Plan With 2,249 Rooms

The transaction is the first step in setting up a co-investment fund to acquire full-service, urban and suburban properties in good locations--the same attributes that piqued interest in the Wyndham offering, a USAA spokeswoman says. With USAA fine-tuning the fund including its size, little is being said about the Wyndham transaction. "It was a good opportunity, great locations ... and the pricing was favorable," she tells GlobeSt.com.

Since 1999, Wyndham has sold all but 26 hotels in a 152-property disposition, collecting $1.7 billion and applying proceeds to debt reduction. The latest to go are facilities in Anaheim, CA, 454 rooms; Overland Park, KS, 356 rooms; Tulsa, OK, 317 rooms; Chesterfield, MO, 223 rooms; a double buy in Houston, 799 rooms in the Post Oak and Allen Center submarkets.

The USAA spokeswoman wouldn't discount the possibility that the fund, when it launches, will tap more Wyndham product. "We are looking at all types, not necessarily just Wyndham," she says.

Under the JV ownership, DT Management Inc., an affiliate of Beverly Hills, CA-headquartered Hilton, remains in charge of the assets. MetLife, a subsidiary of MetLife Inc. in New York City, holds the reins as lender. Neither USAA nor Hilton spokeswomen would say if the JV, Slohat Hotels LP, will participate in the co-investment fund or if the just-announced transaction is simply a one-off.

The new majority owner will finish rehabs started by Wyndham and expand the plan to include all rooms and common areas, the USAA spokeswoman says. The makeover costs, like the majority interest, is being kept a trade secret, for now.

USAA RealCo has more than $3 billion of assets under management, primarily office and industrial properties. Until now, the portfolio's only hospitality properties were the 400-acre, 357-room Four Seasons Resort in Las Colinas near Dallas, the 300-acre, 508-room Westin La Cantera in San Antonio and a now-sold Marriott flag in Austin.

Wyndham acquired the hotels in 1998 in a buying spree that scooped up nine management companies and more than 300 hotels in the US. Bear Stearns & Co. Inc. and JPMorgan Securities Inc. advised Wyndham on the transfer of the majority interest.