Strategic Hotels & Resorts, Inc. Closes Acquisition Of The JW Marriott Essex House Hotel In New York City (United States)
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Strategic Hotels & Resorts, Inc. Closes Acquisition Of The JW Marriott Essex House Hotel In New York City (United States)
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Category: North America & West Indies / Carribean islands - United States - Industry economy -
Group or hotel buyout
This is a press release selected by our editorial committee and published online for free on 2012-09-17
Strategic Hotels & Resorts, Inc. (NYSE: BEE) ("Company") announced today that it has closed on the acquisition of the JW Marriott Essex House Hotel in New York City for a gross purchase price of approximately $362.3 million. Strategic Hotels has established a joint venture agreement with an affiliate of KSL Capital Partners, LLC to fund the equity portion of the acquisition. The Company will own 51.0 percent of the joint venture and will serve as the managing member and asset manager. The joint venture closed on a $190.0 million first mortgage financing originated by Bank of America to fund the balance of the purchase price. Marriott International will begin operating the hotel on Tuesday, September 18, 2012. Work will begin immediately on property improvement plans, estimated at $18.3 million, to distinguish the property under the JW Marriott flag.
The Company forecasts that its pro rata share of earnings from the property, including net operating income guarantee payments from Marriott International, will contribute approximately $3.5 million of EBITDA for the remainder of 2012. Management is reaffirming its 2012 guidance range of Comparable EBITDA in the range of $165.0 million to $180.0 million and Comparable FFO in the range of $0.21 to $0.29 per fully diluted share.
Commenting on the closing, Laurence Geller, President and Chief Executive Officer of Strategic Hotels & Resorts, Inc., said: "We are proud to once again be involved with this marquee asset, especially given its attractive deal terms, unique and enviable Central Park South location and tremendous upside potential. Consistent with our strategy of being an opportunistic investor, we moved quickly to take advantage of this highly-compelling opportunity. We are thrilled to have both another irreplaceable asset with Marriott International and to launch a new partnership with KSL Capital Partners, LLC, one of the industry's most admired investors."
About the Property
Towering 40 floors and offering commanding views of Central Park, Essex House is among the most luxurious and recognized hotels in Manhattan. Quintessentially New York, the Hotel has played host to world dignitaries and celebrities alike since opening in 1931. The building underwent a comprehensive $90 million renovation in 2007. Today, the Hotel features world-class amenities including a full-service spa and fitness center, a fine-dining restaurant and well-appointed meeting and event spaces. The 509 guestrooms offer stylish furnishings that celebrate the Property's rich history while offering guests all the comforts of a luxury hotel.
About Strategic Hotels & Resorts
Strategic Hotels & Resorts, Inc. is a real estate investment trust (REIT) which owns and provides value-enhancing asset management of high-end hotels and resorts in the United States, Mexico and Europe. The Company currently has ownership interests in 18 properties with an aggregate of 8,271 rooms and 851,600 square feet of multi-purpose meeting and banqueting space.
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