"The government of Singapore pays us asset management fees and incentive fees based on the performance of the hotels," says James Mead, EVP and CFO for Strategic Hotels & Resorts. "Strategic Hotels will also receive fees from "capital events such as the sale of the hotel or refinancing," he says.

Strategic Hotels has had joint ventures before with Singapore before it became a public company and for hotels in Europe, Mead says. The InterContinental Chicago and the Hyatt Regency La Jolla had "always been identified to us as potential opportunity joint venture candidates," he says. The hotels are in "great markets" and are not part of capital investment operational and marketing repositioning programs," he says. The two hotels are valued at $450 million, Mead says. Earnings before interest, taxes, depreciation and amortization are expected to be $34.5 million for the two hotels in 2007.

Strategic Hotels & Resorts acquired an 85% interest in the Intercontinental Chicago in 2005, and has since increased ownership to 100%, and has owned the Hyatt Regency La Jolla "since the late 1990's," Mead says. The 419-room Hyatt Regency La Jolla, at 3777 La Jolla Village Dr. in San Diego, has more than 34,000 sf of function space and the Café Japengo and the Sporting Club and Spa.