Radisson Hotel Cross Keys in Baltimore, Md. for $17.0 million
ARLINGTON, Va., March 29, 2007—Interstate Hotels & Resorts (NYSE: IHR), one of the nation’s largest independent hotel management companies, today announced that it has formed a joint venture with an affiliate of Maryland-based Meisel Capital Partners to purchase the 147-room Radisson Hotel Cross Keys in Baltimore, Md. for $17.0 million from affiliates of The Blackstone Group. Interstate, which has operated the property since 1998, acquired a 15 percent minority equity interest for approximately $0.75 million, which includes its share of a planned $1.5 million upgrade and renovation to the hotel. Concurrent with the closing, Interstate executed a long-term agreement to manage the property.
“This is a high-quality, well-established property with an excellent location in a close-in, upscale Baltimore suburb,” said Thomas F. Hewitt, chief executive officer. “With this transaction, we continue to execute our strategy of diversifying our earnings base beyond management fees to include real estate ownership, through joint ventures and wholly owned acquisitions.
“This transaction also presented us with an opportunity to re-establish a management and investment relationship with Meisel Capital Partners, a long-time client/partner of Interstate for whom we have managed a number of assets, including the Reach and Casa Marina Resorts in Key West, Fla.”
“We’re delighted to partner with Interstate in this venture,” said Joel Meisel, principal of Meisel Capital Partners. “We have worked with them in the past and have the utmost confidence in their ability to maximize this hotel’s returns and help it further its leadership position in this market. They bring to the table a proven management track record, the many advantages of their size, and significant project management and repositioning experience.”
“This project has substantial upside potential, and we see a number of opportunities to enhance asset value,” said Leslie Ng, Interstate’s chief investment officer. “We believe the hotel will benefit from reconcepting and upgrading the food & beverage operation to take advantage of its location amid substantial retail and office space. Furthermore, our research anticipates minimal new supply in the market for the next three years, and this is the only full-service hotel within a five-mile radius. We will continue to selectively seek other acquisition opportunities that make economic sense and are consistent with our portfolio profile.”
Located at 5100 Falls Road approximately six miles from downtown Baltimore, just off Interstate 83, between Baltimore's Inner Harbor and I-695 (the Baltimore Beltway), the hotel is part of the Village of Cross Keys, a mixed-used development featuring an upscale collection of boutique retail shops and specialty stores, as well as office space, in a well-landscaped outdoor setting. It is convenient to shopping, entertainment and all the major attractions of downtown Baltimore and Baltimore County, as well as to such major area medical facilities as the Johns Hopkins Medical Complex and Sinai Hospital, which are significant demand generators for the hotel. Also nearby are Johns Hopkins University, Morgan State University and Loyola College.
Hotel amenities include 7,000 square feet of flexible meeting space suitable for groups of up to 200, a fitness facility and outdoor pool/spa, and a full-service restaurant and lounge.
As of February 28, 2007 Interstate Hotels & Resorts operated 204 hospitality properties with more than 46,000 rooms in 36 states, the District of Columbia, Canada, and Russia. In addition, Interstate Hotels & Resorts has contracts to manage 16 hospitality properties with more than 4,400 rooms currently under development. For more information about Interstate Hotels & Resorts, visit the company’s Web site: 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.
|Also See:||Hospitality Properties Trust Acquires the 195 room Harbor Court Hotel in Baltimore for Approximately $60 million; Signs Agreement with IHG to Manage the Hotel under the InterContinental Hotels and Resorts Brand / January 2006|