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Strategic Hotel Capital Announces Acquisition of Five Luxury Hotels
$549 Million Purchase Focuses on Superior Properties And Increases Total Company Portfolio to $861.5 Million
CHICAGO, Oct. 14, 1997 - Strategic Hotel Capital Incorporated, a privately held real estate operating company, has acquired a package of five first-class and luxury hotel properties for a total of $549 million. The hotels include
The properties were acquired from The Prudential Insurance Company of America.
In a separate agreement, Prudential has committed to an investment of up to $225 million for an equity stake in Strategic Hotel Capital. Prudential's stake may include an investment on behalf of its institutional clients, in addition to its General Account.
The $549 million purchase brings Strategic Hotel Capital's total portfolio to $861.5 million. President Laurence Geller stated, "These outstanding properties reflect our strategy to acquire hotels with strong consumer and brand name recognition in high growth markets. We are forging relationships with preferred operators and will assist them to further improve operating results by providing tested operating techniques through our Hotel Value-Delivery Operating System."
Other markets in which Strategic Hotel Capital currently owns properties include Orlando, Philadelphia, Santa Clara, St. Louis, and Washington, D.C. The acquisition marks an important step in Strategic Hotel Capital's goal of becoming a preeminent owner of first-class and luxury hotels, managed by leading hotel operators, in major urban and resort markets. The company intends to acquire hotels with long-term management contracts already in place with preferred operators, Mr. Geller said, citing a substantial pipeline of properties either under contract or in due diligence for the remainder of 1997.
Strategic Hotel Capital acquired the former Geller Co., founded by Laurence Geller in 1989. The company had seven years experience working with leading hotel operators to improve operations and profitability. Today, this group is considered to be one of the most experienced management teams in the industry. "Our strategy is grounded in the significant opportunity identified through our research to work with our preferred operators to create and deliver value in this segment of the hotel industry. Together, we will bring operating improvements to hotel assets in which we have invested," Mr. Geller said.
According to Mr. Geller, Strategic Hotel Capital intends to accomplish this goal by exercising investment discipline and sharing operating expertise with the hotel operators.
Strategic Hotel Capital was formed in May 1997 and is focused on becoming the preeminent owner of first-class and luxury hotel properties. The company intends to maximize the value of its investments and create sustainable growth in cash flow by providing active and intensive oversight to its select preferred operators in targeted growth markets. As of October 14, 1997, the company owns, has under contract, or is in the process of conducting due diligence on properties valued in excess of $1.255 billion.
Source: Strategic Hotel Capital Incorporated
Contact: David Snyder of Strategic Hotel Capital, 312-715-4200
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