News for the Hospitality Executive
Interstate Hotels Forms Joint Venture with Investcorp
Real Estate Group
Will Acquire for $118 million from Afiliates of The Blackstone Group the 321-room Hilton Seelbach,
Louisville in Kentucky; the 226-room Crowne Plaza Madison in Wisconsin;
and the 288-room Sheraton Columbia in Maryland
|ARLINGTON, Va., September 19, 2007—Interstate Hotels &
Resorts (NYSE: IHR), one of the nation’s largest independent hotel management
companies, today announced the formation of a joint venture partnership
with Investcorp International’s U.S. based Real Estate Group. The
partnership, along with Interstate, have agreed to acquire three hotels
from affiliates of The Blackstone Group L.P. for an aggregate price of
$118 million: the 321-room Hilton Seelbach Louisville in Kentucky; the
226-room Crowne Plaza Madison in Wisconsin; and the 288-room Sheraton Columbia
in Maryland. Interstate will invest approximately $4.7 million in
exchange for a 15 percent equity interest in two of the properties, the
Hilton Seelbach and the Crowne Plaza Madison. The two joint venture
properties will continue to be managed by Interstate under new management
As part of the overall transaction, Interstate will also acquire 100% of the third hotel, the Sheraton Columbia, for $46.5 million. The company plans to invest $12 million in a comprehensive renovation of the property, including upgrades to all guest rooms and public spaces, which is expected to be completed by the end of 2008. Interstate will fund the acquisition with available cash and capacity under its senior revolving credit facility. The transaction is expected to close in the fourth quarter.
“This falls directly within our strategy of owning real estate, both for our own account and in joint venture partnerships,” said Thomas F. Hewitt, Interstate’s chief executive officer. “This transaction is an illustration of our successful execution of our growth strategy. We remain opportunistic in our acquisition strategy and maintain flexibility to structure transactions within dynamic markets.”
“These three, geographically diverse properties are located in key urban, airport and major suburban markets,” said Leslie Ng, chief investment officer. “All of the properties are strong performers with steadily improving RevPAR and income and have significant further upside potential. This is our first venture with Investcorp, one of the world’s largest and most diverse alternative investment managers, and we look forward to exploring additional opportunities with them.”
“The acquisition of these hotels is consistent with our multi-disciplinary focus of aggressively pursuing opportunities across product platforms and geographies to deliver strong cash flows and above average returns to our global clients,” said John Fraser, Co-Head, Investcorp Real Estate Group. “Interstate has been successfully managing these properties and is thoroughly familiar with the individual markets. Given Interstate’s solid track-history, expertise and proprietary management systems, we are very confident in its ability to drive these properties to their fullest potential.”
Sheraton Columbia, Maryland
Hilton Seelbach Louisville, Kentucky
Crowne Plaza Madison, Wisconsin
About Investcorp Real Estate Group.
The Investcorp Real Estate Group is a well-capitalized, return-oriented real estate investor with an investment portfolio totaling in excess of $4 billion and a long and distinguished track record of success. Investcorp’s real estate team, is experienced in the acquisition, development, financing, leasing, management, and disposition of a wide variety of property types including office, retail, hotel, residential, mixed-use, luxury resort and others. The group takes a flexible approach to investing and works closely with local operating partners on both a co-investment and direct investment basis, targeting investment profiles ranging from core-plus to opportunistic in markets throughout the U.S.
The Investcorp Real Estate Group is part of Investcorp, a leading provider and manager of alternative investment products. Investcorp has offices in New York, London and Bahrain and is publicly traded on the London Stock Exchange (IVC) and Bahrain Stock Exchange (INVCORP). The firm has five lines of business: private equity, real estate, hedge funds, venture capital and Gulf growth capital. Founded in 1982, Investcorp has grown to become one of the largest and most diverse alternative investment managers in terms of both product offerings and geography, and currently has approximately $13 billion in invested assets under management. Additional information on Investcorp can be found at www.investcorp.com.
As of August 31, 2007, Interstate Hotels & Resorts operated 189 hospitality properties with more than 43,000 rooms in 36 states, the District of Columbia, Belgium, Canada, Ireland, Mexico and Russia, including six wholly-owned properties and 20 properties with a minority ownership interest through 13 separate joint ventures. In addition, Interstate Hotels & Resorts has contracts to manage 16 hospitality properties with nearly 4,600 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:||Interstate Hotels Invests $5.7 million in a Three-property Portfolio of Tesoro Resorts in Mexico; Interstate Will Manage the Three Former Grupo Situr Properties in Los Cabos, Manzanillo and Ixtapa / August 2007|
|Interstate Hotels & Resorts Acquiring the 495 room Westin Atlanta Airport Hotel for $74 million or $149,500 per Key; Property is Company's Sixth Wholly-Owned Property / May 2007|