• News
  • SAN DIEGO
  • Real Estate

Strategic buying out interest on Hotel Del

Strategic Hotels & Resorts Inc. announced Tuesday that it has signed an agreement to acquire the remaining 63.6 percent ownership interest in the 757-room Hotel del Coronado for $210 million.

Strategic (NYSE: BEE), which holds the 36.4 percent minority interest, will acquire majority interest from affiliates of The Blackstone Group (NYSE: BK).

The transaction values the Del at a gross value of $787 million, including $18 million of cash now held at the property and within the joint venture, and assumption of the existing $475 million mortgage financing.

Blackstone had bailed out the fabled hotel in 2011, after it was threatened with a default on a roughly $600 million loan on the property.

In 2013, Blackstone announced it would request $450 million to refinance the hotel, which is undergoing upgrades.

"We are thrilled to be acquiring the remaining equity position in the Hotel del Coronado and to have the opportunity to fully own this truly iconic hotel in the very attractive San Diego market," said Raymond L. "Rip" Gellein, Strategic chairman and CEO in a statement.

"The Hotel Del is experiencing excellent growth in group and transient business, and is expected to outperform in the coming years given the lack of any new supply in the San Diego market," Gellein added.

Management estimates the to-be-acquired 63.6 percent interest in the hotel is projected to generate an incremental $19 million to $21 million of earnings before interest, taxes, depreciation and amortization (EBITDA) for the rest of 2014.

In the first quarter of 2014, revenue per available room grew 11 percent at the property, resulting in 21 percent EBITDA growth.

Subject to certain closing conditions, the transaction is expected to close in 2014's second quarter.

User Response
0 UserComments

Hotel del Coronado

Company Website

1500 Orange Ave.
Coronado, CA 92118

Hotel del Coronado Executive(s):

Donna Gonser

  • Manager

Bob Antes

  • Chief Financial Officer

Barry Brown

  • Director of Sales

Andre Zotoff

  • General Manager, Vice President