News for the Hospitality Executive
Investcorp Real Estate Acquires the 176-room Residence Inn
for Approximately $40 million and Plans Renovation of Property
NEW YORK, June 1, 2011 -- Investcorp Real Estate, the U.S.-based real estate arm of alternative asset manager Investcorp, today announced that it has acquired Residence Inn Manhattan Beach, a 176-room Marriott brand, extended stay hotel in Los Angeles, California, which will see Investcorp adding to its portfolio of hotel properties across the U.S.
Investcorp has agreed to a new franchise agreement with Marriott, and will embark on a capital investment plan to renovate and upgrade the property, including guest room interiors and the building exterior. The capital investment plan will also include a completely new gatehouse. The total consideration for the acquisition was approximately $40 million. A large component of this capitalization includes a reserve for this renovation.
The transaction reflects Investcorp's focus on assets with strong fundamentals, such as a good location, stable operations and favorable outlook. The Manhattan Beach property is located on Sepulveda Boulevard in the heart of popular Manhattan Beach, one mile from the beach and five miles south of Los Angeles International Airport. It is close to the facilities of several major corporations such as Skechers, Boeing and Lockheed Martin, all of which create steady demand.
"We are very pleased to add Residence Inn Manhattan Beach to our real estate hospitality portfolio," said Herb Myers, a managing director in Investcorp's real estate group. "The property's location is excellent: in the dense coastal Los Angeles market, minutes away from the beach and with nearby corporate demand. Despite the recent challenging environment, this property has consistently outperformed the market with extraordinary occupancy rates over the last four years. This is our second acquisition of a Residence Inn flagged hotel and we have had much success thus far with what we consider to be the extended stay hotel category leader. "
Mortgage financing for the Residence Inn transaction was provided by Morgan Stanley. Interstate Hotels & Resorts, an existing Investcorp operating partner, will continue to provide management and operation services for the property. Interstate and Investcorp are currently partners in the Hilton Seelbach located in Louisville, Kentucky and the Crowne Plaza located in Madison, Wisconsin.
About InvestcorpInvestcorp is a leading provider and manager of alternative investment products. Investcorp has offices in New York, London and Bahrain and is publicly traded on the Bahrain Bourse (INVCORP). Investcorp has three business areas: corporate investment in the US, Europe and the Gulf, real estate investment in the US and global hedge funds. As at March 31, 2011, Investcorp had $11.8 billion in assets under management. Further information is available at www.investcorp.com.
|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|