Acquires Two Additional Hotels in a Joint Venture with Investcorp Real Estate Group
ARLINGTON, Va., Dec. 3 /PRNewswire-FirstCall/ — Interstate Hotels & Resorts (NYSE:IHR) , a leading hotel real estate investor and one of the nation’s largest independent operators of full and select-service hotels, today announced the completion of the previously announced transaction to acquire three hotels from affiliates of The Blackstone Group L.P. for an aggregate price of $118 million.
Two of the hotels, the 321-room Hilton Seelbach Louisville in Kentucky and the 226-room Crowne Plaza Madison in Wisconsin, were acquired through a joint venture partnership with Investcorp International’s U.S.-based Real Estate Group. Interstate invested approximately $4.7 million for a 15 percent equity interest in these properties, which will continue to be operated by Interstate under new management agreements.
As part of the overall transaction, Interstate closed on the acquisition of a 100 percent interest in the third hotel, the Sheraton Columbia, for $46.5 million. The company will immediately begin a $12 million comprehensive renovation of the property, including upgrades to all guest rooms and public spaces. The renovation is expected to be completed by the end of 2008.
Interstate funded the acquisitions with available cash and capacity under its senior revolving credit facility.
“This transaction, which includes our seventh wholly owned property and two additional joint venture properties, illustrates our continued ability to execute on our growth strategy,” said Thomas F. Hewitt, Interstate’s chief executive officer. “We know these properties well and are confident that we can create substantial value for our partners and our shareholders.”
About Investcorp Real Estate Group
With offices in New York and Los Angeles, the Investcorp real estate group is a well-capitalized, value-oriented real estate investor with an investment portfolio totaling in excess of $5 billion (total capitalization) 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 and luxury resorts. The group takes a flexible approach to investing and works closely with local operating partners and developers on both a co-investment and direct investment basis.
Investcorp’s 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: real estate, private equity, hedge funds, technology investment, 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, or through the contacts below.
About Interstate
As of November 30, 2007, Interstate Hotels & Resorts owned seven hotels and had a minority ownership interest through separate joint ventures in 22 hotels and resorts. Together with these properties, the company and its affiliates manages a total of 192 hospitality properties with more than 43,000 rooms in 36 states, the District of Columbia, Belgium, Canada, Ireland, Mexico and Russia. Interstate Hotels & Resorts also has contracts to manage 15 hospitality properties with approximately 4,400 rooms currently under construction. 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. Except for historical information, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially, including the volatility of the national economy, economic conditions generally and the hotel and real estate markets specifically, the war in Iraq, international and geopolitical difficulties or health concerns, governmental actions, legislative and regulatory changes, availability of debt and equity capital, interest rates, competition, weather conditions or natural disasters, supply and demand for lodging facilities in our current and proposed market areas, and the company’s ability to manage integration and growth. Additional risks are discussed in Interstate Hotels & Resorts’ filings with the Securities and Exchange Commission, including Interstate Hotels & Resorts’ annual report on Form 10-K for the year ended December 31, 2006.
Contact:
Carrie McIntyre
SVP, Treasurer
(703)387-3320
First Call Analyst:
FCMN Contact: julie@dalygray.com
Source: Interstate Hotels & Resorts
CONTACT: Carrie McIntyre, SVP, Treasurer of Interstate Hotels & Resorts,
+1-703-387-3320
