Brookfield Agrees to Acquire Watermark Lodging Trust for $3.8B

by Taylor Williams

NEW YORK CITY AND CHICAGO — Private real estate funds managed by Brookfield Asset Management (NYSE: BAM) have agreed to acquire Chicago-based hospitality REIT Watermark Lodging Trust for $3.8 billion.

Watermark’s portfolio was constructed over the past decade and currently consists of 25 luxury hotels and resorts totaling 8,100 rooms across 14 states. The properties are primarily located in Sun Belt markets.

Under the terms of the deal, Brookfield will acquire all outstanding shares of Watermark’s common stock for approximately $6.73 per share. The purchase price represents a premium of more than 7.5 percent from the most recently published net asset values per share as of Dec. 31, 2021. The deal is expected to close in the fourth quarter.

“Hotels and resorts of this scale and quality are difficult to replicate,” says Lowell Baron, managing partner and chief investment officer in Brookfield’s real estate group. “This portfolio is well positioned given its concentration in the Sun Belt, as well as in coastal destinations and gateway cities with high barriers to entry.”

Morgan Stanley & Co. LLC is serving as exclusive financial advisor to Watermark. Hodges Ward Elliott is providing estate advisory services to Watermark, and Clifford Chance US LLP and Paul Hastings LLP are acting as legal counsel.

Fried Frank Harris Shriver & Jacobson LLP is acting as legal counsel to Brookfield, and Citigroup, Bank of America, JP Morgan and Wells Fargo are acting as financial advisors. That consortium of lenders is also providing acquisition financing for the transaction.

Following the announcement, Brookfield’s stock price opened at $47.55 per share on Monday, May 9, slightly up from $46.65 per share a year ago.

— Taylor Williams


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