CHICAGO—Strategic Hotels & Resorts, Inc. today announced two significant transactions: the closing of the sale of the Marriott London Grosvenor Square hotel and the acquisition of the remaining 50% ownership interest in the Fairmont Scottsdale Princess. Combined with the previously completed sale of the Four Seasons Punta Mita resort, the company successfully executed over $715 million in transactions in the first quarter of 2014.
Strategic Hotels & Resorts, Inc. closed on the sale of the 237-room Marriott London Grosvenor Square hotel for £125.15 million ($207.7 million), or approximately £528,000 per key ($877,000). Net proceeds from the transaction total approximately £58.1 million ($96.5 million), after the repayment of property-level net debt of £67.0 million ($111.3 million). The hotel was sold to an affiliate of Hong Kong-based private equity firm Joint Treasure and remains subject to a ground lease with 43 years remaining on the term. The company was advised by JLL on the sale of the hotel.
“By closing on the sale of the Marriott London Grosvenor Square, we are finalizing our exit of the European market, as previously committed,” stated Raymond L. “Rip” Gellein, chairman and CEO of Strategic Hotels & Resorts, Inc. “In addition, this sale will eliminate approximately $1 million of annual frictional costs associated with the asset and allow us to redeploy capital into one of the highest growth assets in our portfolio.”
Strategic Hotels & Resorts, Inc. also closed on the acquisition of the remaining 50% ownership interest in the 649-room Fairmont Scottsdale Princess resort for approximately $90.6 million. Prior to the transaction, the company owned a 50% ownership position in the asset through a joint venture with an affiliate of Walton Street Capital, L.L.C. The transaction values the asset at a gross value of $307.5 million and includes the assumption of the existing $117 million mortgage financing. As part of the transaction, the company earned a promoted interest that was negotiated during the 2011 restructuring of the asset totaling $19.3 million, resulting in a net purchase price of approximately $288 million.