CHICAGO, Jan. 29, 2015 /PRNewswire/ -- Strategic
Hotels & Resorts, Inc. (NYSE: BEE), today announced that it has
acquired the 250-room Montage Laguna Beach from an affiliate of
Ohana Real Estate Investors LLC for $360.0
million, plus customary working capital
adjustments. The Company funded the acquisition, in part,
through the issuance of 7,347,539 shares of common stock to an
affiliated designee of the seller, priced at $13.61 per share, or an implied valuation of
$100.0 million. In addition, the
Company assumed a $150 million
mortgage loan encumbering the property, priced at a fixed interest
rate of 3.90%, which matures in August 2021. The remaining
portion of the purchase price was funded with existing cash
balances.
Montage Hotels & Resorts will continue to manage the Forbes
Five-Star destination resort, which features 250 ocean facing
guestrooms and is located on approximately 30-acres of fee simple
owned land sitting atop a 50-foot bluff overlooking the Pacific
Ocean. Opened in 2003, the hotel features 60 suites, 16,000 square
feet of indoor meeting space, a 20,000 square foot spa, and
multiple acclaimed food and beverage outlets.
"We are thrilled to acquire Montage Laguna Beach, a truly iconic
luxury hotel located on one of the best resort settings in the
continental United States. The
acquisition is consistent with our strategy of expanding our
best-in-class portfolio of irreplaceable and world-class luxury
hotels located in North America,"
commented Raymond L. "Rip" Gellein, Chairman and Chief Executive
Officer of Strategic Hotels & Resorts, Inc. "The
Southern California market
generally, and the coastal Orange
County market specifically, have been among the highest
rated markets in the country and are poised to continue their
strong growth given the diverse set of demand drivers and no
competitive supply in the current pipeline as the result of
extremely high barriers to entry. The opportunity to acquire a
hotel of this prominence is exceptionally rare and we are delighted
to work with the team at Ohana on this transaction as well as
beginning what we believe will be a long and successful partnership
with Montage, whose exceptional stewardship of this asset over the
years has positioned the company as a pre-eminent operator of
luxury hotels and resorts."
Said Alan Fuerstman, Founder
& Chief Executive Officer of Montage Hotels & Resorts, "We
are excited to be working with Strategic Hotels & Resorts, who,
as one of the leading luxury hotel owners in our business, share
our ongoing commitment to the outstanding hospitality established
at Montage Laguna Beach over many years."
The purchase price represents a 16.5 times multiple on
forecasted 2015 EBITDA of $21.8
million and a 5.0 percent capitalization rate on forecasted
2015 NOI of $18.1 million.
"Montage Laguna Beach is one of the Southern California resort market leaders with
a trailing twelve month RevPAR penetration index of 185 times and a
2015 budgeted ADR of nearly $600 and
Total RevPAR over $1,000, both of
which meaningfully exceed the average of these respective metrics
in our already industry leading portfolio," continued Gellein.
"Together with Montage, we will continue delivering a superior
guest experience at the hotel while further enhancing operating
results by leveraging our industry leading asset management
expertise and their ability to deliver market-leading results."
JLL acted as an advisor on the transaction. The Company was
represented by Greenberg Traurig LLP and Paul Hastings LLP on the
transaction and Ohana was represented by Dentons.
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. The Company currently has
ownership interests in 18 properties with an aggregate of 8,325
rooms and 875,000 square feet of meeting space. For a list of
current properties and for further information, please visit the
Company's website at http://www.strategichotels.com.
About Ohana Real Estate Investors LLC.
Ohana Real Estate Investors (OREI) is a real estate investment
and development firm focused on high quality, desirably located
hotels and fully serviced residential communities. OREI's operating
portfolio includes the Montage Beverly Hills, the Montage Deer
Valley, and Maravilla Los Cabos, an oceanfront private residential
community under development in Cabo San
Lucas. The company is currently developing Hanalei
Plantation Resort on the island of Kauai and Saggio Hills in Healdsburg, CA. For further information,
please visit www.ohanare.com.
About Montage Hotels & Resorts
Montage Hotels & Resorts is a hotel and resort management
company founded by Alan J. Fuerstman
in 2002. Designed to serve luxury travelers and homeowners, Montage
Hotels & Resorts is a diverse hotel management company that is
the compilation of two hotel collections that cater to the broad
range of travel desires and needs of the luxury consumer. Montage
Hotels offers comfortable luxury hotels and residences, with a
unique sense of place and spirit, impeccable hospitality and
memorable culinary, spa and lifestyle experiences. Pendry Hotels
will be a celebration of the best of Southern California, influenced by great
taste-making destinations across the world. Offering anticipatory
service and fashion-forward design, Pendry Hotels will open its
first hotel in San Diego in 2016.
For more information, please visit www.montagehotels.com and
www.pendryhotels.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, 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 effects of economic conditions and disruption 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, 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; contagious disease
outbreaks; 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 SEC, 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.
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SOURCE Strategic Hotels & Resorts, Inc.