Radisson Lexington Hotel in Manhattan
|ARLINGTON, Va., October 4, 2004 — MeriStar Hospitality Corporation
(NYSE: MHX), one of the nation’s largest hotel real estate investment trusts
(REIT), today announced that it acquired an interest in the landmark 705-room
Radisson Lexington Hotel, in Midtown Manhattan. MeriStar has made
a $50 million structured investment which will provide a $5.75 million
cumulative annual preferred return and a 49.99 percent equity participation.
MeriStar financed this investment with cash on hand. “We are pleased to have been able to reallocate capital from our non-core asset sales into a strong hotel in a premier market. We completed this transaction without having to access the capital markets while still maintaining adequate liquidity,” said Donald D. Olinger, chief financial officer.
“This strategic investment provides entry into the dynamic Midtown Manhattan market offering a strong current yield with substantial upside potential while limiting our downside exposure,” said Paul W. Whetsell, chairman and chief executive officer.
“The transaction is consistent with our focus on larger hotels, in strong urban markets with high barriers to entry. New York City is one of the strongest performing markets in the U.S. and has excellent growth potential. This hotel is extremely well positioned near Midtown Manhattan’s businesses and tourist attractions which should enable it to fully participate in that dynamic market’s growth.”
The 28-story landmark hotel was built in 1929, and is located in Midtown at the southeast corner of Lexington Ave. and 48th St. The property features 82 suites, 101 deluxe rooms and 522 standard rooms. An $18 million renovation was completed in 2001 and included upgrades to all public spaces, guest rooms, bathrooms and mechanical systems. Ninety rooms were further upgraded to Business-Class rooms in March 2004, including new carpet, granite-topped work desks and luxury quality linens.
The hotel has leased retail space to four food and beverage outlets, including Raffles, J. Sung Dynasty, Latin Quarter (LQ) and Starbucks Coffee, which simplifies operations and provides a stable cash flow base for the property.
Highgate Oxford Management Company, which has managed the property since 1999, will continue to manage the hotel. The investment continues the diversification of MeriStar’s management providers.
Arlington, Va.-based MeriStar Hospitality Corporation owns 76 principally upscale, full-service hotels in major markets and resort locations with 21,210 rooms in 22 states, and the District of Columbia.
This press release contains forward-looking statements about MeriStar Hospitality Corporation, including those statements regarding future operating results, the timing and composition of revenues, expected levels of capital expenditures, and expected proceeds from asset sales, among others.
MeriStar Hospitality Corporation
|Also See:||Gettys Fast Track Solutions Expeditiously Transformed the Historic Lexington Hotel into the High-styled Radisson Hotel New York-East Side Hotel / June 2001|
|New Owners of the 722-room Metropolitan Hotel in Midtown Manhattan Plan Renovation and Repositiong / July 2003|