Bloomberg Anywhere Remote Login Bloomberg Terminal Request a Demo

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Morgans Sells Royalton and Morgans Hotels to FelCor Lodging

April 4 (Bloomberg) -- Morgans Hotel Group Co., a boutique hotelier, agreed to sell the Royalton and Morgans hotels in New York City to FelCor Lodging Trust Inc. for $140 million to help reduce debt.

The hotels were valued at about $500,000 per room, New York-based Morgans said in a statement today. The company, which expects $100 million in net proceeds from the sale, will continue to manage both properties under a 15-year agreement.

“This is a terrific outcome and an important continuation in our shift toward an ‘asset light’ business model, allowing us to focus on higher-margin management and branding opportunities,” Morgans Chief Executive Officer Michael Gross said in the statement.

Morgans has been seeking to cut debt and said it would use the proceeds from the sale to further reduce its load. The company in October won extensions for loans backed by its Hudson New York hotel in Manhattan and the Mondrian Los Angeles after paying down a portion of the money owed on the two properties.

The hotelier will pay $37.7 million in debt with the proceeds from the Royalton and Morgans sale. The transaction will terminate a credit line that had been backed by the properties and the Delano hotel in Miami, Morgans said.

FelCor, an Irving, Texas-based real estate investment trust, said in a separate statement that it expects to complete the deal in the second quarter. The Royalton and Morgans hotels will be the company’s first properties in New York.

To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net.

To contact the editors responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.