Brookfield scoops up three resorts, including world famous Atlantis | Financial Services News | FP Street | News

As a result of a $175-million loan made five years ago, Brookfield Asset Management has become the owner of three resorts, including one in the Bahamas where Daniel Craig made his debut as James Bond in the movie Casino Royale.

Kerzner International Holdings Ltd., which took the loan to help it privatize in 2006 before global tourism took a hit in the aftermath of the financial crisis, has been forced to restructure. In addition to the Ocean Club, Brookfield will take ownership of the pink Atlantis Paradise Island resort, also in the Bahamas, and the One & Only Palmilla in Mexico.

"We're thrilled to own these iconic assets," said Andrew Willis, a spokesman for Brookfield. "They are high-quality assets."

Kerzner will continue to manage the properties. Sol Kerzner, chairman and chief executive of Kerzner International, said in a statement that the restructuring was the result of "constructive discussions" with lenders that have been going on "for some time."

Mr. Kerzner, 76, built what his company website calls the "mythical city of Atlantis" on Paradise Island property he bought from Merv Griffin, the late talk show host and game show creator. The resort is surrounded by an artificial open-air marine habitat featuring 50,000 sea creatures and a marina to "attract the sleek international mega-yacht set," according to the site.

A $1 billion expansion begun in 2007 added hotels, a new dolphin habitat and expanded the Aquaventure water park.

In September of 2008, as the financial crisis deepened, Kerzner opened a second Atlantis in the Persian Gulf on the outer frond of Palm Jumeirah, Dubai's man-made, tree-shaped island.

This is not the first time a commercial real estate loan by one of Brookfield's funds has led to ownership of a well-known property.

Earlier this year, Brookfield, a global asset management company, converted a loan to equity in the Hard Rock Hotel and Casino in Las Vegas. In that case, new management was brought in after a string of troubles at the rock-themed hotel.

The Hard Rock had been owned by Morgans Hotel Group and a unit of Credit Suisse.

Industry watchers say Brookfield is unlikely to be interested in holding onto the properties long-term but is under no pressure to sell them, particularly given the somewhat distressed conditions under which they were bought.

Kerzner and Brookfield expect to close the arrangement for the resorts in the Bahamas and Mexico by yearend. The transaction is subject to conditions including approval of the Bahamian government.

In a nod to its movie set past, the Ocean Club features a James Bond Suite. It also boasts tennis courts and championship golf courses, according to Luxury Travel Magazine.

Toronto-based Brookfield, which has about $150-billion in assets under management, specializes in real estate, infrastructure, power and private equity.

Financial Post, with files from Bloomberg News