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Park Central Hotel Purchased by LaSalle Hotel $405.5 MM $434 Per Key

Monday, 06 June 2011 00:00

Hotel Real Estate News NYC

BETHESDA, Md.--(BUSINESS WIRE)-- Multi-operator real estate investment trust LaSalle Hotel Properties (LHO: News ) Monday said it agreed to acquire New York-based The Park Central Hotel for $405.5 million.

The hotel acquisition is expected to close toward the end of the third quarter, subject to the company's completion of due diligence as well as customary closing requirements and conditions. Following the deal closure, the hotel will continue to be managed by Highgate Holdings.

870 7th Ave, New York, NY 10019 http://www.parkcentralny.com/

Privately held Park Central is a 934-room, urban, full service hotel, located on Seventh Avenue in midtown Manhattan. The hotel, originally constructed in 1928, features two food and beverage outlets, including Cityhouse, a contemporary steakhouse, and Bar Bella, a lobby lounge.

Following the acquisition, LaSalle plans to implement a renovation of the hotel, currently estimated to cost $30 to $35 million, including guestrooms and guest bathrooms, corridors and the hotel's lobby. The renovation is expected to commence during 2012.

LaSalle President and Chief Executive Officer Michael Barnello said, "We are excited about the acquisition of The Park Central Hotel and the opportunity to further invest in New York City. This asset features an excellent hotel location within New York City and benefits from numerous corporate and leisure demand drivers."

LaSalle, which owns 35 upscale full-service hotels, expects to fund the majority of the deal price with net proceeds of approximately $216.6 million from its previously completed sale of common shares and hotel property level financing.

It was on April 26 that LaSalle announced that the public offering price for the 7 million shares previously sold to Goldman, Sachs & Co., the sole underwriter of the offering, was $27.65 per share.

The company then had noted that the net proceeds would be used to fund all or a portion of the cost of future hotel acquisitions, including the potential acquisition of a hotel property located in a major U.S. market in which it already owns hotel properties.

LaSalle also said then that a portion of the net proceeds will be used to pay down amounts outstanding under its senior unsecured credit facility and for general corporate purposes.

LHO closed Friday's regular trading session at $26.19, down from previous close of $26.46, on a volume of 772,700 shares.

LaSalle Hotel Properties is a leading multi-operator real estate investment trust owning 35 upscale full-service hotels, totaling over 8,700 guest rooms in 13 markets in 9 states and the District of Columbia. The Company focuses on owning, redeveloping and repositioning upscale full-service hotels located in urban, resort and convention markets. LaSalle Hotel Properties seeks to grow through strategic relationships with premier lodging companies, including Westin Hotels and Resorts, Hilton Hotels Corporation, Outrigger Lodging Services, Noble House Hotels & Resorts, Hyatt Hotels Corporation, Benchmark Hospitality, White Lodging Services Corporation, Thompson Hotels, Sandcastle Resorts & Hotels, Davidson Hotel Company, Denihan Hospitality Group, the Kimpton Hotel & Restaurant Group, LLC, Accor, Destination Hotels & Resorts, HEI Hotels & Resorts, JRK Hotel Group, Inc. and Viceroy Hotel Group.