(By Balaseshan) Strategic Hotels & Resorts Inc. (NYSE:BEE) said it has closed on the acquisition of the JW Marriott Essex House Hotel in New York City for a gross purchase price of about $362.3 million.
Strategic Hotels has established a joint venture agreement with an affiliate of KSL Capital Partners LLC to fund the equity portion of the acquisition. The company will own 51.0% of the joint venture and will serve as the managing member and asset manager.
The joint venture closed on a $190.0 million first mortgage financing originated by Bank of America to fund the balance of the purchase price. Marriott International Inc. (NYSE:MAR) will begin operating the hotel on September 18.
The company said work will begin immediately on property improvement plans, estimated at $18.3 million, to distinguish the property under the JW Marriott flag.
The company forecasts that its pro rata share of earnings from the property, including net operating income guarantee payments from Marriott International, will contribute about $3.5 million of EBITDA for the remainder of 2012.
The company's management is reaffirming its 2012 guidance range of comparable EBITDA in the range of $165.0 million to $180.0 million and comparable funds from operations of $0.21 to $0.29 per share. Street analysts predict earnings of $0.28 per share for the full year.
BEE closed Friday's regular session up 2.67% at $6.54. The stock has been trading between $3.76 and $7.01 for the past 52 weeks.