$118M Takes 835-Key Portfolio

ARLINGTON, VA-Interstate Hotels & Resorts and Investcorp Real Estate Group have partnered to buy three hotels for $118 million, one of which Interstate Hotels will solely own. The unusual JV structure is a reflection of the different strategies the two companies have towards investment, Interstate CIO Leslie Ng tells GlobeSt.com.

The duo–which have teamed up for the first time in this transaction–are acquiring the properties from affiliates of The Blackstone Group LP. They are: the 321-room Hilton Seelbach Louisville in Kentucky; a 226-key Crowne Plaza Madison in Wisconsin; and a 288-unit Sheraton Columbia in Maryland.

It is the Sheraton Columbia that Interstate is buying separately within the JV, Ng says. It is acquiring the property for $46.5 million, a sum that is part of the total $118 million paid for the three properties. Interstate is tapping available cash and capacity under its senior revolving credit facility to fund the transaction, which is expected to close in the fourth quarter.