The man who made Windows a proper noun and Office into something other than commercial real estate is now plunking some spare change into the hospitality business.
Gates was already one of the richest people in the world when he left the CEO post at Microsoft (NASDAQ: MSFT) in 2000. (He formally left the board in March 2020.) Since then, he's turned his considerable interests to global philanthropy while becoming the largest private landowner in the country.
And now, the man worth some $130 billion (pending a divorce settlement) has turned more of his attention to hotels. Or at least his money managers have.
Three-fourths of Four Seasons goes to Microsoft's main man
Last week, Four Seasons Hotels and Resorts said that Cascade Investment LLC -- which exists to invest Gates' money and is the actual owner of all that farmland -- would pay $2.21 billion for what will amount to 71.25% ownership of the iconic brand.
Four Seasons was founded by Isadore Sharp in 1960, and he still controls 5% of the operation he still chairs, the company said in the Sept. 8 announcement. According to Four Seasons, which was taken private in 2007, that includes 121 hotels and resorts and 46 residential properties in 47 countries, complemented by a pipeline of more than 50 projects at various stages of development.
Cascade already owns about 47.5% of Toronto-based Four Seasons and is buying 23.75% more from Kingdom Holding Company (KHC), the investment vehicle of a Saudi prince.
But not just any prince. Reuters notes that Prince Alwaleed bin Talal was among the dozens of royals, senior officials, and business people detained for months in a Riyadh Ritz Carlton and then released in early 2018 in what Saudi rulers called a "corruption crackdown."
But that's between them.
The Millionacres bottom line
What may matter most to investors in this country is the recovery and future of hospitality properties in general. The industry appeared to be in rapid recovery from the pandemic, but the explosion of the delta variant has tempered expectations.
Of course, investors with the world's deepest pockets can ride out a downturn longer than most, but the fact is they think it's worth it. After all, Bill Gates isn't in it to give money away. He leaves that to his foundation.
And that's why the Four Seasons sale is of note to everyday real estate investors, including those who put some lucre into such real estate stocks as Marriott International and real estate investment trusts (REITs) as Ryman Hospitality Properties, Xenia Hotels & Resorts, and Apple Hospitality REIT.