Built in 1924 and located in Downtown Seattle, the 450-room hotel features two restaurants and two lounges, an indoor pool and fitness center, high-speed Internet access in all guestrooms and 20,000 sf of meeting and event space. Four Seasons Hotels Inc. has managed the Downtown hotel for the past 21 years. As part of the acquisition, Legacy is handing the long-term management contract to its affiliate, Fairmont Hotels & Resorts, for an unspecified payment.
Legacy CFO Jerry Patava tells GlobeSt.com says the assumed mortgage is at current interest rates, but adds that the low loan-to-value ratio (41.9%) gives the company the option of a cash-out refinancing. Patava says the current capitalization rate on the investment is "in the high single digits."
Legacy owns 22 luxury and first-class hotels in Canada, including the Empress in Victoria, B.C. The Olympic acquisition gives Legacy two hotels in the US. Legacy last year acquired the 415-room Monarch Hotel in Washington, DC for $145 million.
The sale was announced in early July, concurrent with an arbitration settlement between Four Seasons Hotels Inc. and hotel owner JMB Realty Corp. The two had been in arbitration for several months -- ever since JMB gave notice that its management contract would end with the completion of the proposed sale. JMB leases the hotel's land long-term from the University of Washington, whose real estate is managed by Seattle-based Unico Properties.
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