Acquires the Sawgrass Marriott Resort & Spa; Interstate Retains
Minority Ownership and Management Contract
|ARLINGTON, Va., July 7, 2006 - Interstate Hotels & Resorts (NYSE:
IHR) today announced that the Sawgrass Marriott Resort & Spa, which
was owned by Interstate and an affiliate of CIGNA Investments, Inc. has
been sold into a new joint venture comprised of affiliates of Redquartz
Boundary Ltd. (RQB), an Irish-based investment company, and its investment
partners and Interstate, which will retain a minority ownership interest.
Interstate received proceeds of approximately $15.5 million upon the sale
of the asset and immediately reinvested $7.0 million for its new minority
interest. An additional $2.3 million will be contributed by Interstate
for its share of equity for renovations and working capital, bringing the
company's total investment to $9.3 million. In addition, Interstate will
continue to operate the resort under a long-term management contract.
Sawgrass Marriott Resort & Spa
1000 PGA TOUR Boulevard
Ponte Vedra Beach, Florida
"This acquisition clearly illustrates the benefits of our strategy of co- investing in hotels with select owners as a way to diversify our earnings base," said Thomas F. Hewitt, Interstate chief executive officer. "In addition to participating in the appreciation of the real estate upon the sale, we were also able to secure a new minority investment position and a long-term management contract on this extraordinary property. This is a 'win- win' situation for both the majority owner and Interstate, as we more closely align our interests. This is our first venture with RQB, and we look forward to expanding our relationship with them."
The hotel will undergo a renovation that will completely make over the 508 rooms and suites in the hotel's tower. The $11.0 million refurbishment is expected to commence in the fall of 2006 and be completed in early 2007.
The PGA-owned TPC golf course adjacent to the resort currently is closed and being totally revamped, including construction of a new clubhouse. Sawgrass guests enjoy playing privileges at the world-class course under a long-term contractual agreement between the resort and the PGA. The refurbished course is expected to open in time for the Players Championship Tournament in May 2007.
"This is a great resort with a world-class reputation that has undergone a number of upgrades recently, including a significant expansion of the meeting space to a total of 56,000 square feet and the opening of the 20,000-square foot spa and salon," said Leslie Ng, Interstate's chief investment officer. "With the completion of the golf course and tower renovation next year, the property will have significant upside opportunities." The resort is located along the Atlantic Coast of Florida between Jacksonville and historic St. Augustine.
Interstate Hotels & Resorts operates more than 260 hospitality properties with nearly 60,000 rooms in 41 states, the District of Columbia, Canada, and Russia. BridgeStreet Worldwide, an Interstate Hotels & Resorts' subsidiary, is one of the world's largest corporate housing providers. BridgeStreet and its network of Global Partners offer more than 9,800 corporate apartments located in more than 95 MSAs throughout the United States and internationally. For more information about Interstate Hotels & Resorts, visit the company's Web site: http://www.ihrco.com.
This press release contains "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995, about Interstate Hotels & Resorts, including those statements regarding future operating results and the timing and composition of revenues, among others, and statements containing words such as "expects," "believes" or "will," which indicate that those statements are forward-looking, although not all forward- looking statements will contain such words.
Interstate Hotels & Resorts
|Also See:||The Sawgrass Marriott Resort & Spa and the Renaissance Resort at World Golf Village Host the Two Teams Playing in the Super Bowl; Ordering Additional 1,000 Pounds of Steak / February 2005|
|Debi Bishop Named General Manager of Sawgrass Marriott Resort & Beach Club / November 2003|
|Interstate Hotels & Resorts Acquires the 131-room Hilton Garden Inn in Baton Rouge, La. for $14.4 million, $110,000 per key / June 2006|