NEW YORK CITY — Strategic Hotels & Resorts (NYSE: BEE) has closed on the previously announced $362.3 million purchase of the 509-room Essex House Hotel, located in New York City.
“We are proud to once again be involved with this marquee asset, especially given its attractive deal terms, unique and enviable Central Park South location and tremendous upside potential,” says Laurence Geller, president and CEO of Strategic Hotels.
The company established a joint venture agreement with an affiliate of KSL Capital Partners to fund the equity portion of the transaction. Strategic Hotels will own 51 percent of the joint venture. The partnership closed on a $190 million first mortgage loan from Bank of America to fund the balance of the purchase price.
Construction will begin immediately on property improvement plans to distinguish the property under the JW Marriott flag. Additionally, Marriott International will begin operating the hotel tomorrow, Sept. 18.
“Consistent with our strategy of being an opportunistic investor, we moved quickly to take advantage of this highly compelling opportunity,” Geller says. “We are thrilled to have both another irreplaceable asset with Marriott International and to launch a new partnership with KSL Capital Parters, one of the industry’s most admired investors.”
Strategic Hotels’ stock price closed at $6.54 per share on Friday, up from $4.65 a year earlier.