LaSalle Hotel Properties (LHO - Free Report) signed an agreement to acquire the Park Central Hotel for $405.5 million in midtown Manhattan. The transaction is subject to the company’s completion of closing requirements and is expected to close by the end of third quarter 2011.
The 934-room hotel is currently owned and managed by Highgate Holdings, which will continue to manage the hotel after the sale.
LaSalle Hotel expects to fund the majority of the purchase price with net proceeds of approximately $216.6 million generated from the company’s previously completed sale of shares and property level financing.
Located across the street from Carnegie Hall, The Park Central Hotel is within walking distance of midtown businesses, shopping and some of New York City’s greatest tourist attractions. The Park Central Hotel has 14,000 square feet of meeting and function space, including a 8,500 square feet Grand Ballroom.
The property also has 4,800 square feet of retail space. LaSalle Hotel plans to renovate the hotel with an estimated cost of $30.0 to $35.0 million. Expected to start in 2012, the renovation will include guestrooms, corridors and the hotel’s lobby. With this deal, the company will expand its presence in New York City.
LaSalle Hotel Properties is a leading real estate investment trust which engages in the purchase, ownership, redevelopment, and leasing of primarily upscale and luxury full-service hotels in resort and urban business markets. LaSalle Hotel Properties seeks to grow through strategic relationships with premier lodging companies.
The main focus of the company is to provide moderate long-term earnings growth to its shareholders through opportunistic investments in high-quality lodging properties.
LaSalle Hotel currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Starwood Hotels & Resorts Worldwide Inc currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.