A New York private equity firm has purchased the St. Regis hotel for $100 million in cash, ending a long slide toward foreclosure for the property’s previous owner.
A source involved in the transaction confirmed last week that Westbrook Partners, which has offices in D.C. and 10 other cities worldwide, bought a loan on the St. Regis allowing it to immediately foreclose on the original buyer, an Irish firm that bought it at the peak of the market and quickly ran into trouble with its loans when real estate values plummeted in the recession.
Adorned with Louis XVI chandeliers and located two blocks from the White House on 16th Street NW, the 182-room St. Regis Washington is routinely ranked as one of the most luxurious hotels in the region, its reputation further burnished after undergoing two major renovations in the past 24 years.
The $100 million price tag was a steep discount from what the hotel fetched four years ago. Claret Capital, a private equity firm based in Ireland, purchased the building in 2007 for $170 million after it had gone for just $45 million two years earlier. It was Claret’s only asset in the United States and the company flew Ireland’s orange, green and white flag out front.
Last October Barclays Capital, Claret’s lender on the property, began foreclosure proceedings and scheduled a number of auctions that were canceled before one finally took place April 12, at which Barclays took over the property. Barclays then sold its interest to Westbrook, which quickly foreclosed on Claret in mid-May.
“Foreign ownership is never as good as local ownership, which can see the property every week, every day, whatever it takes,” said Marc Magazine, a principal at Humboldt Hospitality Advisors, which briefly managed the asset for Claret.
Magazine said the new owner should see the value of the hotel increase. “I think it’s a good price today and that because of its iconic location, it’s a price that Westbrook should do very well on in the future as the high-end market recoups,” he said.
Westbrook focuses on properties in major American cities. In Washington it also owns the Fairfax at Embassy Row, the hotel at 2100 Massachusetts Ave. NW.
Multiple industry newsletters and Web sites reported the St. Regis transaction last week.