FelCor Announces Acquisition of Iconic New York City Knickerbocker Hotel
01 Fevereiro 2012 - 4:01AM
Business Wire
FelCor Lodging Trust Incorporated (NYSE: FCH) today announced
the acquisition of the landmark Knickerbocker Hotel in midtown
Manhattan, New York, for $115 million. Consistent with its
portfolio repositioning strategy, the company also announced it is
marketing 16 non-strategic hotels. FelCor will apply the sale
proceeds to strengthen its balance sheet and reduce leverage.
Knickerbocker Hotel Acquisition
FelCor formed a joint venture with an affiliate of Highgate
Holdings LLC (“Highgate”) which acquired the Knickerbocker Hotel in
midtown Manhattan, New York. Located at Broadway and 42nd Street,
the Knickerbocker Hotel boasts one of the world’s premier addresses
for both business and leisure travelers, and will serve as FelCor’s
flagship upon opening in late 2013. The four-plus star hotel will
feature approximately 330 large guest rooms (average in excess of
420 square feet), several food and beverage outlets - including a
large rooftop sky bar and lounge directly overlooking Times Square
- state-of-the-art meeting space, and a full-service fitness
facility.
This acquisition underscores FelCor’s commitment to enhancing
and diversifying its portfolio into core markets such as New York
City, where the company now owns three properties. New York City
has significantly outperformed the industry in long-term RevPAR
growth. Given the Knickerbocker’s superior location in Manhattan,
FelCor expects the hotel will produce strong long-term EBITDA
growth. FelCor expects the Knickerbocker to be its last acquisition
in this cycle, as the company focuses on strengthening its balance
sheet through the sale of non-strategic hotels and reducing
leverage.
The purchase price reflects a 30 percent discount per square
foot, compared to recent similar transactions, and is meaningfully
below replacement cost. The redevelopment cost will be primarily
funded by a development loan – for an aggregate investment of
approximately $697,000 per key. FelCor expects the project will
generate an internal rate of return that exceeds the Company’s
weighted average cost of capital, and the property is expected to
generate nearly $24 million of EBITDA at the first year of
stabilization, yielding strong future cash flow.
“With its unique architecture and Times Square location, the
Knickerbocker is an irreplaceable asset in a marquee location. To
acquire a landmark hotel at a meaningful discount to replacement
cost is a rare opportunity, and we are confident this acquisition
is a strategic investment that will enhance future stockholder
value,” said Richard A. Smith, FelCor's President and Chief
Executive Officer. “This acquisition is perfectly aligned with a
central element of our long-term strategy – investing in the future
of the business – as we continue to focus on other components of
our strategy, specifically strengthening our balance sheet through
non-strategic asset sales and debt reduction.”
FelCor owns 95 percent of the joint venture and partnered with
Highgate, which will manage the hotel upon opening. The joint
venture will leverage the development expertise of both companies
to realize the full value of this iconic New York building. The
hotel floors have been cleared and abated and are ready for
immediate redevelopment, which greatly mitigates the risks
typically associated with adaptive reuse projects. In addition, the
redevelopment plan has been approved by New York City’s Landmarks
Commission and New York City’s Board of Standards and Appeals.
FelCor has completed more than $300 million of high-rise,
ground-up development projects, including three upscale, high-rise
condominium buildings containing over 600 units. In addition, the
company successfully redeveloped high-density, urban properties,
including the San Francisco Marriott Union Square and Fairmont
Copley Plaza. Highgate has an extensive track record of developing
successful hotels in Manhattan that have generated superior returns
for its investors and is a premier Manhattan hotel operator.
Portfolio Repositioning
FelCor is marketing a total of 16 non-strategic hotels as part
of its long-term portfolio repositioning strategy. The funds
resulting from the sale of these hotels will allow the company to
continue to reduce debt, improve future funds from operations
(“FFO”), increase long-term EBITDA growth and contribute to a sound
and flexible balance sheet.
FelCor has 16 non-strategic hotels for sale:
- Three Holiday Inns – Orlando, FL
(Airport); Toronto, ONT; and San Antonio, TX (Airport)
- Three Sheratons – Phoenix, AZ; Ft.
Lauderdale, FL; and Atlanta, GA (Galleria)
- Three Doubletree Guest Suites –
Raleigh/Durham, NC; Tampa Bay, FL; and Wilmington, DE
- Seven Embassy Suites Hotels – Anaheim,
CA; Boca Raton and Jacksonville, FL; Atlanta, GA (Airport); New
Orleans, LA; St. Paul, MN; and Nashville, TN
The company expects to generate approximately $350 million in
gross proceeds with the sale of these hotels. FelCor is committed
to using these funds to repay all accrued preferred dividends,
reduce debt and strengthen its balance sheet. Nine of the 16 hotels
secure approximately $150 million of mortgage debt. The company has
received strong interest from potential buyers and expects to sell
the majority of the hotels in 2012.
FelCor has brought to market a total of 25 hotels since December
2010. Nine of which have been sold to date, for gross proceeds of
$222 million, representing approximately 12 times 2010 hotel
EBITDA. The Company expects to sell a majority of the remaining 16
hotels in 2012.
With a focus on creating a high-value portfolio of superior
hotels, FelCor intends to sell a total of up to 40 non-strategic
hotels as part of its portfolio repositioning plan, representing 72
percent of its suburban hotels and 44 percent of its airport
hotels. FelCor’s core hotels are located primarily in major, urban
markets and resort destinations. The remaining suburban and airport
hotels are generally located in gateway cities and benefit from
relatively high barriers-to-entry. The remaining non-strategic
hotels will be brought to market at the appropriate time.
About FelCor
FelCor, a real estate investment trust, owns 76 primarily
upper-upscale, full-service hotels that are located in major and
resort markets throughout 22 states. FelCor partners with leading
hotel companies to operate its diversified portfolio of hotels,
which are flagged under globally recognized names such as,
Doubletree®, Embassy Suites®, Fairmont®, Hilton®, Marriott®,
Renaissance®, Sheraton®, Westin® and Holiday Inn®, and premier
independent hotels in New York. Additional information can be found
on the Company's Web site at www.felcor.com.
With the exception of historical information, the matters
discussed in this news release include “forward-looking statements”
within the meaning of the federal securities laws that are
qualified by cautionary statements herein and in FelCor’s filings
with the Securities and Exchange Commission. We undertake no
obligation to update any forward-looking statement to conform the
statement to actual results or changes in our expectations.
Felcor Lodging (NYSE:FCH)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
Felcor Lodging (NYSE:FCH)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024