Strategic Hotels & Resorts, Inc. To Acquire The Remaining Interest In The
Hotel del Coronado
CHICAGO, May 27, 2014
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
"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.
Contact: Diane Morefield, EVP, Chief Financial Officer, Strategic Hotels &
Resorts, Inc., (312) 658-5740 or Jonathan Stanner, VP, Capital Markets &
Treasurer, Strategic Hotels & Resorts, Inc., (312) 658-5746
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