Strategic Hotels & Resorts has made two significant transactions: It's closed on the sale of the Marriott London Grosvenor Square hotel and acquired the remaining 50-percent ownership interest in the Fairmont Scottsdale Princess.
Strategic sold the 237-room London property to an affiliate of Hong Kong-based private equity firm Joint Treasure for a reported $207.7 million ($877,000 per key). The move comes on the heels of Strategic's $200-million sale of the Four Seasons Punta Mita in December to Bill Gates' Cascade Investment. Strategic has now executed more than $715 million in transactions in the first quarter of 2014.
JLL advised on the sale.
Strategic also closed on the acquisition of the remaining 50-percent ownership interest in the 649-room Fairmont Scottsdale Princess resort for approximately $90.6 million. Prior to the transaction, the company had a half-ownership position through a joint venture with an affiliate of Walton Street Capital. The transaction values the asset at a gross value of $307.5 million and includes the assumption of the existing $117-million mortgage financing.
"The Fairmont Scottsdale Princess is one of our highest growth assets as the resort continues to benefit from the addition of 60,000 square feet of new meeting space as well as improving market trends in the greater Phoenix/Scottsdale market. In fact, since the introduction of new meeting spaces and other amenities, group RevPAR penetration at the resort has increased nearly 17 points," said Gellein. "We are pleased to essentially match-fund this acquisition with the proceeds from the sale of the Marriott London Grosvenor Square, allowing us to execute this acquisition without requiring us to raise external capital."