Adler, Davis and Perez-Alvarado of JLL Hotels arrange $362.3 million sale of Essex House; Morrison & Foerster provide legal counsel to seller, DIG EH Hotel LLC

On behalf of Dubai Investment Group, Jones Lang LaSalle Hotels has arranged the sale of the 509-room JW Marriott Essex House Hotel, located at 160 Central Park South, for a gross purchase price of $362.3 million. The firm also secured the acquisition financing on behalf of the new owner, Strategic Hotels & Resorts. 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% of the joint venture and will serve as the managing member and asset manager. The joint venture closed on a $190 million first mortgage financing originated by Bank of America to fund the balance of the purchase price. Morrison & Foerster provided legal counsel to the seller, DIG EH Hotel LLC. Attorneys Mark Edelstein, Jeffrey Temple, Keith Print and James Pincow were on the Morrison & Foerster team. Arthur Adler ([email protected]), managing director and CEO of Jones Lang LaSalle Hotels, Americas; managing director Jeffrey Davis and senior VP Gilda Perez-Alvarado ([email protected]) led the Jones Lang LaSalle Hotels team. Mathew Comfort, executive VP of the firm's real estate investment banking group, led the team on the acquisition financing. "New York City has rebounded strongly from the recession and the market continues to be high on investors' list of cities to target for acquisition in 2012," said Adler. "We expect the New York hotel market to be the leading market for investments in the U.S., as evidenced by the year-to-date deal volume, which has reached $1.2 billion. Overall in 2012, acquisition activity is expected to reach $2.4 billion, equaling the second most liquid year on record. The overall New York market experienced a 6.1% RevPAR jump through year-to-date July 2012, and still ranks as the number one market in terms of overall RevPAR." According to Adler, The Essex House attracted strong interest from investors throughout the world by virtue of its Central Park South location, its long-standing reputation in the Manhattan market and the extremely high quality of its guest rooms and public spaces. Marriott International will began operating the hotel on September 18. Work will begin immediately on property improvement plans, estimated at $18.3 million, to distinguish the property under the JW Marriott flag. Laurence Geller, president and CEO of Strategic Hotels & Resorts said, "We are proud to once again be involved with this marquee asset, especially given its attractive deal terms, unique and enviable Central Park South location and tremendous upside potential. Consistent with our strategy of being an opportunistic investor, we moved quickly to take advantage of this highly-compelling opportunity. We are thrilled to have both another irreplaceable asset with Marriott Internationaland to launch a new partnership with KSL Capital Partners, LLC, one of the industry's most admired investors." Strategic Hotels forecasts that its pro rata share of earnings from the property, including net operating income guarantee payments from Marriott International, will contribute approximately $3.5 million of EBITDA for the remainder of 2012. Management is reaffirming its 2012 guidance range of Comparable EBITDA in the range of $165 million to $180 million and Comparable FFO in the range of $0.21 to $0.29 per fully diluted share. Website: http://www.joneslanglasallehotels.com/hotels/EN-GB/Pages/Home.aspx Twitter: @JLLNews (https://twitter.com/#!/jllnews) Email: [email protected] Jones Lang LaSalle Hotels is a global real estate services firm focused exclusively on hotels & hospitality. We provide acquisition and financing advice, valuations, investment sales and asset management for luxury hotels, select service and budget hotels, smaller hotels and pubs, from single assets to large portfolios and mixed-use developments. In the last five years, Jones Lang LaSalle completed nearly 4,000 advisory and valuation assignments and more sale, purchase and financing transactions than any other hotels real estate firm in the world worth more than $30 billion. With 42 offices in 20 countries, no other firm is better connected. Through the firm's depth and breadth of research and experience, Jones Lang LaSalle Hotels knows the market at every level, knows the players and knows how to get results: www.joneslanglasallehotels.com.