Madrid-based real estate investment trust Hotei Properties Group SOCIMI, which changed its name last October from Millenium Hospitality Real Estate, has agreed to sell its 93-room hotel Nômade Temple Madrid to its current operator, Miami-based Nômade People, for €105 million.
The hotel is set to open later this year following a renovation.
One of Nômade People’s key stakeholders is Barry Sternlicht, chairman and CEO of Starwood Capital Group.
The potential sale will see a price-per key of approximately €1.13 million.
The news came in the same 24 hours as investment firm Sanctus Capital completed its acquisition of the 49.72% stake in Hotei held by Minneapolis-based Castlelake, as well as further stakes held by other firms, for a total hold of 53.5%, according to news outlet Demócrata.
Sancus now is in process of considering a 100% acquisition of Hotei. In Spanish law, ownership in a publicly traded entity above a 30% threshold requires transactions to be marketed and structured as full takeovers.
In its divestment activity, Castlelake paid full heed to that stipulation.
Sancus’ deal values Hotei at approximately €199 million.
In a Spanish-language release on the Bolsas y Mercados Españoles stock exchange, a sibling of the Madrid Stock Exchange and geared to small- and medium-sized enterprises, Hotei said the decision on the potential deal is now in the hands of its shareholders at a special shareholders’ meeting on June 10.
According to CoStar, the Nômade Temple Madrid was last traded in October 2022 when Hotei, then named Millenium Hospitality, acquired the hotel in its previous incantation, the Iberostar Las Letras Gran Vía, for approximately £61 million (€71 million).
The 2026 sale will result in an almost 48% increase in value.
Madrid mega-maturity
Ivar Yuste, a partner in the Madrid office of business consultancy PHG Hotels & Resorts, told CoStar News Hotels that the deal was complex, with an interesting history that underlines the heightened maturity of the Madrid market.
He said Castlelake invested in Millenium in 2021 with the explicit goal of gaining exposure to prime Spanish hotel assets while capitalizing on the hospitality sector’s recovery from the COVID-19 pandemic.
“Castlelake had committed a total of €180 million, locking in 49.72% of the SOCIMI’s share capital. … There was a shareholders dispute, and the founder of Millenium, Javier Illán, who built the platform, eventually had to leave his CEO position," he said.
Yuste added Castlelake and the Abu Dhabi Investment Authority were in talks to acquire Millenium/Sancus, but the deal fell through.
Borja Escalada was then named CEO of Millenium, a position he retains through Sancus, of which he is a major and founding partner.
Yuste said when the hotel was initially bought by Millenium when it was the Iberostar, the strategy was to reposition the asset to “really put the property into value.”
“If you look at the differential in pricing versus the exit, first, it reflects the fact that this is now a super-prime destination in Madrid. Second, it is a distinctive luxury brand, (with) absolutely nothing to do with the previous concept, and third, there is an extra premium to pay if you are the operator and you want to buy your own position and not let other buyers come in to bid.
“Madrid has been among the European cities with the highest increase in hotel value over the last decade, and this transaction is a data point that will set a new benchmark for the market,” Yuste added.
In conclusion, Yuste said, the deals of June 10 and 11 are that Escalada, “CEO of Millenium, through his company Sancus, sells the [Nômade Temple Madrid] to the operator Nômade and simultaneously buys the stake of Castlelake in the SOCIMI to take the SOCIMI company off market.”
He added the deals’ major story lines are that they speak loudly of the true testimony of the liquidity of the Spanish hotel market and the ability of managers to retain their prime positions in a key global market like Madrid, or a key investment vehicle like Millenium.
Spanish scale
Sancus itself co-owns two additional hotels in Madrid, the 111-room Bless Hotel Madrid and 154-room Rosewood Villa Magna.
After the Nômade Madrid exit, Hotei now has six hotels in its portfolio — three in Madrid, two in Seville and one in San Sebastian.
Those Madrid hotels are the 139-room JW Marriott Madrid, 51-room Nobu Madrid and 50-room El Autor Hotel Madrid, Autograph Collection.
Hotei sold the 311-room Fairmont La Hacienda resort in Cádiz to ActivumSG for €175 million in 2025.
Nômade’s existing hotels, the 97-room Nômade Temple Tulum and 30-room Nômade Temple Holbox, are in Mexico’s Yucatán Peninsula.
The brand’s pipeline includes: two additional Mexican hotels, in Punta Mita and Todos Santos; two in Brazil, in São Paolo and Trancoso; and one each in Ibiza, Lisbon, Marrakech and New York City.