Proving it's in it to manage rather than own, Marriott International has sold the London Edition, which opened just this past September, and signed binding agreements for the sale of two other company-owned Edition hotels currently under development in Miami Beach and Manhattan.
We learned this was the path Marriott was following back in August, though we didn't know the price. Now we do.
The total purchase price for the three hotels is approximately $815 million, roughly equal to the aggregate estimated total development costs of all three hotels.
While Marriott will no longer own the hotels, it will operate them under long-term management contracts with their new owners, companies ultimately owned by the Abu Dhabi Investment Authority.
The Miami Beach Edition and the New York Edition are under construction and expected to open in the second half of 2014, and the first half of 2015, respectively. Marriott expects to convey each hotel individually to the new owner after construction is complete. The Miami Beach and New York purchase prices are fixed; development costs in excess of the agreed purchase price will not be recovered.
“The sale of all three company-owned hotels is a powerful endorsement of our EDITION brand,” said Arne Sorenson, president and CEO of Marriott International. “This transaction is a key component of our strategy to build the EDITION brand by selectively developing spectacular, brand-defining hotels in gateway cities. We look forward to managing these hotels for many years.”
The residential component of the Miami Beach Edition was not included in this transaction. Marriott will retain ownership of the residential units pending their sale to individual purchasers.
Edition Hotels was famously launched by Marriott in partnership with Ian Schrager back in 2010. The New York Times recently ran an article focusing on the opening of London Edition, Marriott International's chairman Bill Marriott and how the company is looking to rescast itself in order to draw a younger crowd.
Other Edition hotels are planned for Los Angeles; Abu Dhabi; Sanya, China; Gurgaon, India; and Bangkok.