Morgans Hotel Group the operator and 50% owner of the London joint venture that owns Sanderson and St Martins Lane, has announced that the joint venture partners have closed on the sale of the Sanderson and St Martins Lane hotels to Capital Hill Hotels Limited, a Middle Eastern investor with other global hotel holdings.
The sale price for the two hotels is 192 million pounds Sterling, or approximately $300 million, and represents a value of approximately 542,000 pounds, or $847,000, per room.
Morgans’ 50% portion of the net proceeds, after the repayment of debt and closing costs, is approximately $73 million. The Company intends to use the net proceeds to fund the acquisition of The Light Group as well as renovations at existing hotels and growth.
Michael Gross, Chief Executive Officer of Morgans said, “We are pleased to complete this sale and we look forward to a long and beneficial partnership with Capital Hill Hotels as we continue to manage Sanderson and St Martins Lane.
With the $73 million in proceeds from this transaction, we now have approximately $150 million in total liquidity and a balance sheet capable to support growth. Coupled with our recent agreement to acquire The Light Group and strong expansion pipeline, we are making significant strides in establishing the fundamentals we need to execute our vision and extend our position as a leader in global lifestyle hospitality management.”
Morgans will continue to operate the Sanderson and St Martins Lane hotels under long-term management agreements. The terms of the management agreements, including extension options, have been extended to 2041 from 2027.
About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ: MHGC) is widely credited as the creator of the first “boutique” hotel and a continuing leader of the hotel industry’s boutique sector.
Morgans Hotel Group operates Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles, South Beach and New York, Clift in San Francisco, Ames in Boston, Sanderson and St Martins Lane in London, and a hotel in Playa del Carmen, Mexico. Morgans also owns, or has ownership interests in, several of these hotels. Morgans Hotel Group has other property transactions in various stages of completion including a Delano in Cabo San Lucas, Mexico, a Delano in Turkey, a Mondrian in Doha, Qatar, and a Mondrian in Nassau, The Bahamas, and a hotel in New York to be branded with one of MHG’s existing brands.
For more information please visit http://www.morganshotelgroup.com/