Strategic Hotels & Resorts Closes Acquisition Of The JW Marriott Essex House Hotel In New York City for $362.3M
Strategic Hotels & Resorts (NYSE: BEE) 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."
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