The four properties included in the joint venture acquisition are:
Sheraton Frazer Great Valley - 198 Rooms - Frazer, PA (Phila MSA)
Sheraton Mahwah - 225 Rooms - Mahwah, NJ
Latham Hotel Georgetown - 142 Rooms - Washington, DC
Hilton Lafayette - 327 Rooms - Lafayette, LA
Total: 892
Interstate currently manages three of the properties and previously managed the Latham Hotel for the Blackstone Group and MeriStar Hospitality. Upon closing, Interstate will manage all four hotels under new management agreements.
The partnership plans to invest more than $30 million of additional funds for renovations on the hotels over the 24 months following the acquisition, with Interstate's contribution expected to be approximately $2 million.
"This joint venture represents a continuation of our hotel real estate ownership strategy and expands our JV partner universe," said Thomas F. Hewitt, Interstate's chief executive officer. "The four-hotel portfolio was attractively priced, at or below replacement costs, and aligns well with our portfolio of wholly owned and JV real estate holdings.
"The hotel package includes two key upscale, full-service brands, Hilton and Sheraton, and a well-recognized independent boutique hotel in Georgetown that offers significant repositioning opportunity," Hewitt added.
"Three of the properties are located in key urban and major suburban markets with strong barriers to entry-Washington, D.C., northern New Jersey, and the Philadelphia area. The fourth property, the Hilton in Lafayette, La., is having an exceptional year with RevPAR growth in excess of 20 percent, and we expect the hotel to provide strong, stable cash flow going forward. With the anticipated capital investment, this entire portfolio has considerable upside operating potential.""As one of the few management/ownership companies with a strong and growing international presence, we will continue to seek global opportunities and relationships," said Leslie Ng, Interstate's chief investment officer.
"Harte Holdings is a highly regarded Irish investment and development company which owns a wide variety of real estate projects in the United Kingdom, Ireland and mainland Europe, and we look forward to exploring other opportunities together, both domestically and abroad." "This is our first hotel joint venture in the U.S., and Interstate, with its successful track record, its management expertise, and the advantages afforded by its size, represents a very strong partner," said Donal Kelleher, investment director of Harte Holdings.
"We look forward to expanding our relationship with other similar opportunities."About Harte HoldingsHarte Holdings is an Irish-based investment and development company which owns a wide variety of real estate projects in the United Kingdom, Ireland and mainland Europe, with a portfolio consisting primarily of hotels, residential, commercial and retail assets in these areas.
About InterstateAs 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 website:
http://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
Set on a privately owned 810acre island in the River Suir, a mile from Waterford city is the grand and exclusive hotel Waterford Castle.
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