The four properties included in the joint venture acquisition are: the Sheraton Frazer Great Valley in Frazer, PA, which has 198 rooms; the Sheraton Mahwah in New Jersey, which has 225 rooms; the Latham Hotel Georgetown in Washington, DC, which has 142 rooms; and the Hilton Lafayette in Louisiana, which has 327 rooms.
Interstate manages all four hotels under new management agreements. Interstate funded the acquisition with available cash and capacity under its senior revolving credit facility.
Leslie Ng, Interstate's CIO, said in December that the company will continue to seek global opportunities and relationships. "Harte Holdings is a highly regarded Irish investment and development company which owns a wide variety of real estate projects in the UK, Ireland and mainland Europe, and we look forward to exploring other opportunities together, both domestically and abroad."
According to a statement Interstate gave when it first revealed the JV acquisition, the partnership plans to invest more than $30 million of additional funds for renovations on the hotels over the 24 months following the acquisition. Interstate's contribution is expected to be approximately $2 million.
"This joint venture represents a continuation of our hotel real estate ownership strategy and expands our JV partner universe," explained Thomas Hewitt, Interstate's CEO in a statement at the time. "The four-hotel portfolio was attractively priced, at or below replacement costs, and aligns well with our portfolio of wholly owned and JV real estate holdings."
Hewitt said at the time that this hotel package includes two key upscale, full-service brands, Hilton and Sheraton, and a well-recognized independent boutique hotel in Georgetown that offers significant repositioning opportunity. Three of the properties are located in key urban and major suburban markets with strong barriers to entry--Washington, DC, northern New Jersey and the Philadelphia area. "The fourth property, the Hilton in Lafayette, LA, is having an exceptional year with RevPAR growth in excess of 20%, and we expect the hotel to provide strong, stable cash flow going forward. With the anticipated capital investment, this entire portfolio has considerable upside operating potential," he said.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
