Shares of Colony Capital (CLNY) - Get Report jumped Friday after the company said it definitively agreed to sell six hospitality portfolios to the New York hotel owner and operator Highgate, a deal valued at $2.8 billion.
The value includes $67.5 million of gross proceeds and Highgate assuming $2.7 billion of debt.
The six hospitality portfolios consist of 22,676 rooms across 197 hotel properties.
Shares of Colony Capital, Los Angeles, at last check jumped 9.2% to $2.55. They've traded on Friday up as much as 17% at $2.74.
Colony will transfer five of the six portfolios from its hospitality segment and an about 55% interest in the THL portfolio held in its other-equity-and-debt segment.
A sixth hospitality portfolio, called Inland, is under receivership and is excluded from the transaction, Colony Capital said.
The companies hope to close the deal in the first quarter, subject to conditions including certain third-party approvals.
The company has committed to disposing of non-core assets and to "[harvesting] positive value for our hospitality business," Chief Executive Marc Ganzi said in a statement.
Colony Capital is a global investment firm with a $46 billion portfolio.
"The sale of our legacy hospitality assets is a significant milestone in Colony’s digital transformation as we pivot to focus exclusively on our fast-growing digital businesses that generate superior returns for Colony shareholders," Ganzi said.
The company's portfolio currently includes more than $20 billion in digital real estate investments.
Digital real estate is internet property such as domain names, websites and blogs. Some domain names sell for millions of dollars and websites can get acquired for millions more.
Highgate manages more than $10 billion of hospitality assets.