"The Washington, DC market has significant growth yet to come," says Laurence Geller, chief executive officer of Strategic. "We believe our physical improvements to the food and beverage and lobby areas will position this hotel to reap the benefits of the market growth while the hotel continues to lead the market for the foreseeable future."

The hotel, which is 12 blocks from the White House, recently reopened after a $27-million renovation that reduced the number of rooms from 257. The hotel has 160 rooms, 51 luxury suites, 12,500 sf of meeting space, 24,000 sf of retail, underground parking, and a 12,500-sf Four Seasons fitness club and spa. Four Seasons will continue to manage the property.

The company forecasts a period of ramp up after its reopening during the next 12 months and estimates the property will contribute between $9.5 million and $10.5 million of Ebitda in the last 10 months of 2006 and between $10.4 million and $11.4 million in the first 12 months of ownership. Strategic Hotel Capital also operates under the name Strategic Hotel & Resorts. The REIT owns and asset manages high-end hotels and resorts. The company has ownership interests in 17 properties with an aggregate of 8,269 rooms. The acquisition is expected to close during the first quarter. Earlier this month, the company acquired a 45% joint venture ownership interest in San Diego's Hotel del Coronado.