Strategic Hotels & Resorts Inc., headquartered in Chicago, has closed a definitive agreement to recapitalize the joint venture that owns the Hotel del Coronado, one of California's most famous luxury resorts.
Under the terms of the transaction, a new joint venture has been established between the company, Blackstone Real Estate Advisors and KSL Resorts to invest cash in the asset and to convert a portion of the existing debt into equity. Blackstone will become the general partner of the new joint venture, with a 60% ownership interest. Strategic Hotels, which will continue as asset manager of the hotel, and KSL Resorts, the hotel operator, are limited partners with approximately 34.3% and 5.7% ownership stakes, respectively.
The recapitalization transaction values the hotel at approximately $590 million. As part of the agreement, Deutsche Bank originated $425 million in debt financing.
The 670-room Hotel del Coronado is located on 28 acres of oceanfront property in Coronado, Calif., outside of San Diego. It opened in 1888 and was the first U.S. hotel to use electrical lighting. The hotel, which is listed on the National Register of Historic Places, has hosted 11 U.S. presidents and many celebrities and dignitaries, and it achieved cinematic fame as the backdrop for the 1959 Marilyn Monroe film classic ‘Some Like It Hot.’
SOURCE: Strategic Hotels
