STRATEGIC HOTELS RECAPITALIZES FAIRMONT SCOTTSDALE PRINCESS
SCOTTSDALE, AZ — Strategic Hotels & Resorts has closed a definitive agreement to recapitalize the Fairmont Scottsdale Princess, a AAA Five-Diamond luxury resort. The company has created a new joint venture with an affiliate of Walton Street Capital, L.L.C. , a private equity real estate investment firm. The two are equal partners in the JV, though Strategic Hotels will serve as managing member. It will also continue to act as the property's asset manager. The recapitalization includes an amendment and extension of the existing CMBS first mortgage debt through the end of 2013. There is an option for a second extension through April 2015, upon satisfaction of certain terms and conditions. Included in the amendment is a $7-million principal payment for the CMBS first mortgage, among other terms and conditions. The JV has also acquired and retired the hotel's $40-million mezzanine debt. The Fairmont Scottsdale Princess' total property debt has been reduced from a total of $180 million to $133 million.