CHICAGO, July 29, 2015 /PRNewswire/ -- Strategic
Hotels & Resorts, Inc. (NYSE: BEE) today announced that it has
acquired the remaining 49 percent ownership interest in the
514-room JW Marriott Essex House hotel. The Company
previously owned a 51 percent ownership position in the asset
through a joint venture with certain affiliates of KSL Capital
Partners, LLC ("KSL"). Pursuant to the terms of the joint
venture agreements, KSL exercised a contractual put option of its
equity interests in the asset and the Company will issue to certain
affiliates of KSL an aggregate of 6,595,449 shares of common stock
priced at $12.82 per share, or an
implied valuation of $84.6
million. The transaction values the asset at a gross
valuation of approximately $397.6
million, which includes $6.3
million of value for three owned condominiums, $2.2 million of cash currently held within the
joint venture, and the existing $225.0
million mortgage financing.
"We are very pleased to acquire the remaining interest in the JW
Marriott Essex House hotel from our partner, KSL," commented
Raymond L. "Rip" Gellein, Chairman and Chief Executive Officer of
Strategic Hotels & Resorts, Inc. "Under our joint ownership we
created substantial incremental value, with EBITDA projected to
have increased over six times by the end of 2015. There
continues to be significant upside in this iconic hotel, which is
situated on Central Park. The New
York City market is long-term one of the most outstanding
travel markets in the world, and we are confident that our efforts
to reposition the hotel will drive favorable future growth.
This transaction also represents the acquisition of the sole
remaining joint venture interest in our best-in-class portfolio of
hotels and resorts, further simplifying our balance sheet."
The net hotel purchase represents an approximately $757,000 per key valuation. The acquired 49
percent interest in the hotel is projected to generate an
incremental approximately $5.5
million of EBITDA in the remaining five months of
2015.
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
514 guestrooms offer stylish furnishings that celebrate the
property's rich history while offering guests all the comforts of a
luxury hotel.
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 18 properties with an aggregate of 8,199
rooms and 851,000 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 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, 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; contagious disease
outbreaks; 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.
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SOURCE Strategic Hotels & Resorts, Inc.