Strategic Signs Agreement to Sell InterContinental Prague
September 28, 2010 - Strategic Hotels & Resorts, Inc. (NYSE: BEE) announced that the company has signed a share purchase agreement for the sale of the InterContinental Prague to an investment group led by an affiliate of Westmont Hospitality for a total consideration of approximately euro 110.6 million, or approximately euro 297,000 per room.
The total consideration represents the outstanding amount of the property's third party debt and the current interest rate swap liability related to the third party indebtedness, which is estimated to be approximately euro 9.0 million as of August 31. In addition, approximately euro 2.0 million of restricted cash related to the property will be released to the company. The sale, subject to certain closing contingencies, is scheduled to close in the fourth quarter. The 372-room property was forecasted to contribute approximately euro 6.1 million in EBITDA for the full year 2010, representing a sales multiple of 18.1 times and a capitalization rate of 4.8% on NOI.
Chief Executive Officer Laurence Geller remarked, "We are pleased to announce the sale of this property as it reduces corporate overhead related to our European operations, and is in line with the company's disciplined, strategic disposition strategy."
Strategic Hotels & Resorts, Inc. is a real estate investment trust (REIT) which owns and provides value-enhancing asset management of high-end hotels and resorts in the United States, Mexico and Europe. The company currently has ownership interests in 17 properties with an aggregate of 8,002 rooms.
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