Reduces Indebtedness from $630 Million to $425 Million; Establishes New Joint Venture with Blackstone Real Estate Advisors and KSL Resorts
CHICAGO, Feb. 7, 2011 - Strategic Hotels & Resorts, Inc. (NYSE: BEE) today announced that the company has closed a definitive agreement to recapitalize the joint venture that owns the Hotel del Coronado. Under the terms of the transaction, a new joint venture has been established between the Company, Blackstone Real Estate Advisors (Blackstone) and KSL Resorts to invest cash in the asset and to convert a portion of the existing debt into equity. The recapitalization transaction values the hotel at approximately $590 million. As part of the recapitalization, Deutsche Bank originated $425 million in debt financing.
Blackstone will become the general partner of the new joint venture with a 60 percent ownership interest. Strategic Hotels, which will continue as asset manager of the hotel, and KSL Resorts, the hotel operator, are limited partners with approximately 34.3 percent and 5.7 percent ownership stakes, respectively.
Laurence Geller, Chief Executive Officer of Strategic Hotels commented, “We are very pleased by this outcome, as it provides the opportunity for us to achieve attractive returns on our new investment, significantly reduces the hotel’s indebtedness and maintains our ownership in this iconic asset. The Hotel del Coronado is an integral part of our portfolio and we welcome Blackstone into the partnership. Given the attractive growth characteristics of both the hotel and the San Diego market, we expect to further enhance the hotel’s operations and overall value as it returns to, and potentially surpasses, previous peak performance.”
The Hotel del Coronado is one of the crown jewels of San Diego, serving thousands of luxury travelers, corporations and other organizations every month. Located in one of the most desirable travel destinations for individuals and groups alike, the Hotel del Coronado has been serving luxury travelers since 1888.
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, Mexico and Europe. The company currently has ownership interests in 16 properties with an aggregate of 7,630 rooms. For a list of current properties and for further information, please visit the company’s website at http://www.strategichotels.com/
SOURCE Strategic Hotels & Resorts, Inc.