Wyndham Hands Off 1,363 Hotel Keys to Lone Star Funds

The buyer's not talking and the seller's only saying that the deal closed at "very high multiples to their trailing Ebitda," a number also not readily available for the just-sold properties. An industry source says the majority of rooms undoubtedly brought on the low end of the scale. The industry's best guess is the seven hotels could have gone for a low of $40.1 million or as much as $68.2 million.

A Wyndham spokeswoman tells GlobeSt.com that Lone Star Funds knocked on the hotelier's door about three months ago to open talks on its first acquisition from a hotel owner with plenty of product for sale as it trades in deeds for management contracts. The Dallas-based players struck a deal that keeps Wyndham in the driver's seat and the flags in place on the entire package.

"It was the right price and the right company," the spokeswoman says. The package consists of four hotels that were widely marketed and three, including two restored historic properties, that though available weren't actively marketed. Yezan Haddadin with JPMorgan Securities Inc. in New York City represented Wyndham in the sale and Lone Star's C. David Stahl ran the deal on its end.

Though Lone Star's a known buyer of distressed properties worldwide, the Wyndham package was "not a fire sale" and they are good-performing properties, the spokeswoman stresses. "The assets speak for themselves," she adds.

Lone Star's package is the Union Station, a 1900s train station restored eight years ago into a 125-room hotel at 1001 Broadway in Nashville; 147-room Tutwiler at 2021 Park Place North in Birmingham, AL, a 1920s apartment building repackaged eight years ago as a hotel and renovated again in 2000; 320-room Wyndham Roanoke Airport at 2801 Hershberger Rd. in Roanoke, VA; 252-room Doubletree Hotel at 1400 Milwaukee Ave. in Glenview, IL; 148-room Holiday Inn at 441 Rio Concho Dr. in San Angelo, TX; 199-room Radisson Hotel at 2330 W. Northwest Highway in North Dallas; and the 172-room Holiday Inn Aristocrat Hotel, built in the mid-1920s at 1933 Main St. in the Dallas CBD. The majority of properties rose between 1983 and 1988. Wyndham acquired the seven properties in 1998 from Grand Heritage Hotels International of London and Interstate Hotels & Resorts Inc. of Arlington, VA.

Wyndham execs are in New York City, prepping for Thursday's earnings call and weren't available for interviews. So far this year, Wyndham has sold 14 hotels and is holding a definitive agreement with Highland Hospitality Corp. of McLean, VA, to take down another 1,687 rooms in Atlanta, Parsippany, NJ, Hauppauge, NY and Boston. The $227-million deal works out to about $134,500 per key. As with all its sales, Wyndham's been applying net proceeds to its debt.

Lone Star doesn't discuss its portfolio or deep roots in domestic and foreign investment communities. Founded in 1996, Lone Star Funds has amassed more than $8.3 billion of private equity funds to invest in secured and unsecured debt investments and real estate opportunities. The Lone Star Fund IV, a 60-40 teaming of US and foreign capital, is a $4.2-billion opportunity pool and the largest to date. Its US investors include the New York State Teachers, California State Teachers, Washington State Investment Board, Oregon Public Employees and Wisconsin Investment.