CHICAGO, May 27, 2014 /PRNewswire/ -- Strategic
Hotels & Resorts, Inc. (NYSE: BEE), today announced that the
Company has signed an agreement to acquire the remaining 63.6
percent ownership interest in the 757-room Hotel del Coronado for
$210 million. The Company
currently owns a 36.4 percent ownership position in the asset
through a joint venture with certain affiliates of Blackstone Real
Estate Partners VI L.P. ("Blackstone"). The transaction values the
asset at a gross value of approximately $787.0 million, net of approximately $18.0 million of cash currently held at the
property and within the joint venture, and includes the assumption
of the existing $475.0 million
mortgage financing.
"We are thrilled to be acquiring the remaining equity position
in the Hotel del Coronado and to have the opportunity to fully own
this truly iconic hotel in the very attractive San Diego market. Our company has had an
ownership interest in the Del since 2006 and served as asset
manager throughout that period, giving us comprehensive knowledge
of this multi-faceted resort," commented Raymond L. "Rip" Gellein,
Chairman and Chief Executive Officer of Strategic Hotels &
Resorts, Inc. "The Hotel Del is experiencing excellent growth
in group and transient business, and is expected to outperform in
the coming years given the lack of any new supply in the
San Diego market. Further,
the hotel is not encumbered by a long-term hotel management
contract which creates additional flexibility and value as owner of
this property," stated Gellein. "Finally, we would like to
acknowledge Blackstone as an
outstanding partner and for the value they helped create at the Del
during our joint ownership period."
The net purchase price represents a 14.3 times multiple on
forecasted 2014 EBITDA and a 6.2 percent capitalization rate on
forecasted 2014 NOI. Management estimates the to-be-acquired
63.6 percent interest in the hotel is projected to generate an
incremental $19 million to $21
million of EBITDA for the remainder of 2014. In the
first quarter of 2014, RevPAR grew 11 percent at the property
resulting in 21 percent EBITDA growth. The transaction, which
is subject to certain closing conditions, is expected to close in
the second quarter of 2014.
About the Hotel del Coronado
Hotel del Coronado is a 757-room,
25 oceanfront acre resort property located on the Coronado Island
just across the San Diego Bay that first opened in 1888. It is one
of the few surviving examples of an American architectural genre:
the wooden Victorian Beach resort. It is the second largest wooden
structure in the United States and
was designated a National Historic Landmark in 1977 and is a
designated Californian Historical Landmark.
Few, if any, resort destinations in San Diego offer the level of service,
multitude of amenities, and quality beaches of the Hotel del
Coronado. The resort includes 679 recently renovated rooms
and 78 luxury hotel-condo cottages and villas, more than 14,000
square feet of retail destinations, multiple restaurant and bar
offerings, more than 110,000 square feet of meeting space and the
"The Spa at the Del," which features 21 treatment rooms and a full
service fitness center.
The resort has been ranked in USA Today's "Top 10 Resorts in the
World" list, Travel + Leisure's "Top 20 Hotel Spas in the World"
list, and "America's Best Beaches" list by the Wall Street
Journal.
About the Company
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 and Europe. The Company currently has ownership
interests in 16 properties with an aggregate of 7,862 rooms and
835,000 square feet of multi-purpose meeting and banqueting space.
For a list of current properties and for further information,
please visit the Company's website at www.strategichotels.com.
This press release contains forward-looking statements about
Strategic Hotels & Resorts, Inc. (the "Company"). Except for
historical information, the matters discussed in this press release
are forward-looking statements subject to certain risks and
uncertainties. These forward-looking statements include statements
regarding the Company's future financial results, stabilization in
the lodging space, positive trends in the lodging industry and the
Company's continued focus on improving profitability. Actual
results could differ materially from the Company's projections.
Factors that may contribute to these differences include, but are
not limited to the following: the failure of closing conditions to
be satisfied; the effects of economic conditions and disruptions in
financial markets upon business and leisure travel and the hotel
markets in which the Company invests; the Company's liquidity and
refinancing demands; the Company's ability to obtain, refinance or
extend maturing debt; the Company's ability to maintain compliance
with covenants contained in its debt facilities; stagnation or
deterioration in economic and market conditions, particularly
impacting business and leisure travel spending in the markets where
the Company's hotels operate and in which the Company invests,
including luxury and upper upscale product; general volatility of
the capital markets and the market price of the Company's shares of
common stock; availability of capital; the Company's ability to
dispose of properties in a manner consistent with its investment
strategy and liquidity needs; hostilities and security concerns,
including future terrorist attacks, or the apprehension of
hostilities, in each case that affect travel within or to
the United States or Germany or other countries where the Company
invests; difficulties in identifying properties to acquire and
completing acquisitions; the Company's failure to maintain
effective internal control over financial reporting and disclosure
controls and procedures; risks related to natural disasters;
increases in interest rates and operating costs, including
insurance premiums and real property taxes; delays and
cost-overruns in construction and development; marketing challenges
associated with entering new lines of business or pursuing new
business strategies; the Company's failure to maintain its status
as a REIT; changes in the competitive environment in the Company's
industry and the markets where the Company invests; changes in real
estate and zoning laws or regulations; legislative or regulatory
changes, including changes to laws governing the taxation of REITs;
changes in generally accepted accounting principles, policies and
guidelines; and litigation, judgments or settlements.
Additional risks are discussed in the Company's filings with
the Securities and Exchange Commission, including those appearing
under the heading "Item 1A. Risk Factors" in the Company's most
recent Form 10-K and subsequent Form 10-Qs. Although the Company
believes the expectations reflected in such forward-looking
statements are based on reasonable assumptions, it can give no
assurance that its expectations will be attained. The
forward-looking statements are made as of the date of this press
release, and the Company undertakes no obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise, except as required
by law.
SOURCE Strategic Hotels & Resorts, Inc.