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MeriStar Invests $50M in Radisson Lexington

NEW YORK CITY-This is the Arlington, VA-based hospitality firm's entry into the Manhattan market and it is not looking for other city properties. MeriStar Hospitality does not have any other acquisitions in the pipeline, according to the company.

By Melissa Kress | Updated on October 06, 2004

NEW YORK CITY-MeriStar Hospitality Corp. has acquired an interest in the Radisson Lexington Hotel in Midtown with a $50-million structured investment. The move will provide a nearly $5.8-million cumulative annual preferred return and a 49.99% equity participation. The other investor is a private real estate fund, according to the company.

MeriStar financed the investment in the landmark 705-room hotel with cash on hand. According to a company spokesman, MeriStar was attracted to the property because of the location–at the corner of Lexington Avenue and 48th Street–and occupancy rates in the low 90% range.

“We are pleased to have been able to reallocate capital from our non-core asset sales into a strong hotel in a premier market,” says chief financial officer Donald D. Ollinger in a statement. “We completed this transaction without having to access the capital markets while maintaining adequate liquidity.”

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