BETHESDA, MD–The pruning of FelCor' portfolio has begun even before the official close to its merger with RLJ Lodging. It is selling Morgans Hotel NYC at 237 Madison Ave. for $41 million to a partnership between the Kash Group and Shel Capital, according to a separate report in GlobeSt.com. After the closing, the property will be converted to residential use.
The iconic hotel was originally designed in 1927 by architect Andrew Thomas, and completely renovated in 1984. The hotel will be delivered vacant, followed by major capital improvements for the future conversion of the 71,000-square-foot property.
RLJ's Plans For FelCor
Last month in a regulatory filing the locally-based RLJ Lodging Trust provided details about its proposed $7 billion deal with FelCor Lodging Trust.
Read RLJ Updates Market On FelCor Merger
RLJ will focus on two particular asset types within FelCor's portfolio: compact full-service and upscale limited service/urban locations because these asset types have less square footage, fewer food and beverage outlets, limited meeting space and majority of revenue comes from the hotel rooms.
It also intends to recapitalize FelCor's capital structure and sell off the REIT's non-strategic assets, as well as do some selective repositioning.
A Deal Already In The Works
It must be said, though, that the timing of FelCor's sale and the merger with RLJ is tight enough that the sale of the Morgans Hotel NYC most likely began before RLJ made its offer or revealed its plans for FelCor.
Irving, TX-based FelCor announced in its first quarter financial report released on May 9th that it had finalized agreements to sell its 117-room Morgans Hotel NYC, as well as its 168-room Royalton New York Hotel at 44 West 44th St.
The merger was announced at the end of April and RLJ filed its regulatory report on its plans for the acquisition in mid-May.
BETHESDA, MD–The pruning of FelCor' portfolio has begun even before the official close to its merger with RLJ Lodging. It is selling Morgans Hotel NYC at 237 Madison Ave. for $41 million to a partnership between the Kash Group and Shel Capital, according to a separate report in GlobeSt.com. After the closing, the property will be converted to residential use.
The iconic hotel was originally designed in 1927 by architect Andrew Thomas, and completely renovated in 1984. The hotel will be delivered vacant, followed by major capital improvements for the future conversion of the 71,000-square-foot property.
RLJ's Plans For FelCor
Last month in a regulatory filing the locally-based RLJ Lodging Trust provided details about its proposed $7 billion deal with FelCor Lodging Trust.
Read RLJ Updates Market On FelCor Merger
RLJ will focus on two particular asset types within FelCor's portfolio: compact full-service and upscale limited service/urban locations because these asset types have less square footage, fewer food and beverage outlets, limited meeting space and majority of revenue comes from the hotel rooms.
It also intends to recapitalize FelCor's capital structure and sell off the REIT's non-strategic assets, as well as do some selective repositioning.
A Deal Already In The Works
It must be said, though, that the timing of FelCor's sale and the merger with RLJ is tight enough that the sale of the Morgans Hotel NYC most likely began before RLJ made its offer or revealed its plans for FelCor.
Irving, TX-based FelCor announced in its first quarter financial report released on May 9th that it had finalized agreements to sell its 117-room Morgans Hotel NYC, as well as its 168-room Royalton
The merger was announced at the end of April and RLJ filed its regulatory report on its plans for the acquisition in mid-May.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
