Strategic Hotels & Resorts Inc. bought the remaining 49 percent stake in Manhattan’s JW Marriott Essex House for $84.6 million in stock.
The real estate investment trust already owned 51 percent of the hotel in a joint venture with KSL Capital Partners LLC. Affiliates of KSL will be issued about 6.6 million shares of Strategic priced at $12.82 a share, the Chicago-based REIT said in a statement Wednesday. The deal values the property, including the 541-room luxury hotel, three owned condominiums and debt, at about $397.6 million.
“There continues to be significant upside in this iconic hotel, which is situated on Central Park,” Raymond “Rip” Gellein, Strategic’s chairman and chief executive officer, said in the statement. “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.”
Strategic is exploring a sale and hired a bank to help it find potential buyers, people familiar with the matter said last week. The company owns high-end lodging properties across the U.S., including the Ritz-Carlton Half Moon Bay in California, and has a market value of about $3.79 billion.
The joint venture with KSL bought the Essex House in September 2012 for $362.3 million. The hotel on Central Park South, known for the red neon sign bearing its name atop the 40-story tower, opened in 1931.
Strategic climbed 1 percent to close at $13.75. The shares have gained 16 percent in the past 12 months.