Speculation High on Kingsmill Resort Deal

With a new owner expected in less than a week, residents of Williamsburg, Virginia are excited over who will buy Kingsmill Resort.

The 2,900-acre gated community has been up for sale since October 2009. The resort’s Belgian owner AB-InBev hired real estate firm CB Richard Ellis to market the property, as it sought to divest itself of non-core assets . Kingsmill residents named the Blackstone Group, Marriott and the Toll Brothers as the potential new owners.

Doug Henkel, executive vice president of CB Richard Ellis, confirmed that the resort is under a letter of intent”, signifying that a buyer has made an offer. Henkel however declined to identify who the buyer is, further ramping up speculation.

Sources close to the deal point to Blackstone, and local newspaper The Gazette reported on June 9 that the group was edging over its two other contenders.

However, John Gerner, managing director of Richmond-based Leisure Business Advisors, isn’t so sure. He says the proverbial stars are misaligned for a Blackstone takeover.

According to Gerner, Blackstone would likely have picked up the resort at the same time it bought 10 theme parks from the nearby Busch Gardens.

“Blackstone has the money to do what it wants,” he said, noting that the group would not have delayed a Kingsmill buy due to financial constraints. Most likely, company brass weighed the resort purchase during that time and decided against it.

Gerner is intimately familiar with the area, having worked his way up as a ride operator in the adjacent Busch Gardens theme park, and ending in the company’s finance department.

On the other hand, he also acknowledges Blackstone’s penchant for gobbling up both theme parks and resorts. Apart from its Busch operation, Blackstone owns at least seven resorts in the Center Parcs Europe chain, as well as all of Center Parcs UK.

But despite Kingsmill’s proximity to Busch Gardens, in the end it all boils down to finances. “It comes back to if they feel that would be of value to them,” says Gerner. “I would imagine Blackstone would not be uncomfortable with someone else owning it.” He believes the resort will pass to a developer more focused on resorts.

This leaves the door open for a Marriott ownership, who is showing signs of a steady recovery after taking serious hits during the recession. The hospitality giant already owns a hotel just outside the front gate of Kingsmill, as well as a big timeshare resort at the nearby Ford’s Colony.

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