Starwood Capital Group, private investment firm, recently announced that it sold a stake in a $2 billion portfolio of US hotels to investors led by China’s biggest insurance firm, China Life Insurance.
According to Starwood, China Life would serve as the lead investor of the group, which counts among its numbers sovereign wealth funds. It will hold a stake in a portfolio consisting of 280 hotels across 40 states.
“We are honored to have been given the opportunity to serve as stewards of China Life’s capital, and thrilled to embark on a partnership that represents a first-of-its-kind relationship for our firm,” Barry Sternlicht, Starwood chief executive told reporters.
“With this select-service hotel portfolio, China Life has an efficient vehicle for investing in the United States economy as a whole.”
Industry observers have noted that Chinese investments in the US property market are rising as companies seek new growth avenues outside their own country. An HVS report further explained that Chinese firms have a specific appetite for US hospitality investments because more of their compatriots are coming over to the US to visit as tourists.
“I would almost call it a new source of capital,” Mr. Sternlicht further said. Through the years, the U.S. real estate market has “seen Middle Eastern investors, we’ve seen European investors, we saw the arrival and withdrawal of the Russians. I think the arrival of the Chinese life companies is something new.”
“They’re looking for diversification, and it might extend the real estate cycle,” he added.