In separate deals announced June 6, LaSalle Hotel Properties (NYSE:LHO) of Bethesda, MD announced that it signed a purchase and sale agreement to acquire the 934-room Park Central Hotel in New York City for $405.5 million.
In Seattle, the Dow Hotel Co. announced the acquisition of the 304-room Hilton Long Island/Huntington in Melville, N.Y. The purchase was made in a joint venture with Prudential Insurance Company of America for an undisclosed amount from Melville Hotel Owner 2010 LLC. This is DHC's seventh such venture with Prudential.
The full service Park Central is located on Seventh Avenue, between West 55th and West 56th Streets, in midtown Manhattan. LaSalle said the acquisition is subject to the company's completion of due diligence as well as customary closing requirements and conditions, and is expected to close toward the end of the third quarter of this year.
LaSalle anticipates funding the majority of the purchase price with net proceeds of approximately $216.6 million from the company's previously completed sale of common shares on April 26, 2011 and property level financing.
"We are excited about the acquisition of The Park Central Hotel and the opportunity to further invest in New York City," said Michael D. Barnello, President and Chief Executive Officer of LaSalle Hotel Properties. "This asset features an excellent location within New York City and benefits from numerous corporate and leisure demand drivers."
Located across the street from Carnegie Hall, three blocks south of Columbus Circle and Central Park, and five blocks from Rockefeller Center and Radio City Music Hall, The Park Central Hotel is within walking distance of midtown businesses, world renowned shopping, five-star dining and some of New York City's preeminent tourist attractions.
The hotel is also just seven blocks north of Times Square and the theatre district.
The hotel features two food and beverage outlets, including Cityhouse, a contemporary steakhouse that seats 88, and Bar Bella, a 50-seat lobby lounge that serves drinks and light fare. The Park Central Hotel features over 14,000 square feet of flexible meeting and function space, including the 8,500 square foot Grand Ballroom. Additionally, the property includes 4,800 square feet of retail space.
Originally constructed in 1928, The Park Central Hotel has undergone numerous renovations throughout the years, including over $33.0 million since 2004. The Company plans to implement a renovation of the hotel, currently estimated to cost $30.0 to $35.0 million, including guestrooms and guest bathrooms, corridors and the hotel's lobby.
The renovation is expected to start during 2012. The hotel will continue to be managed by Highgate Holdings.
In Melville, NY, as part of the acquisition plan, the Hilton Long Island/Huntington will undergo a $15 million renovation that will include upgraded hotel rooms, corridors, public spaces, HVAC, parking and landscaping. DHC will manage the property and oversee the enhancement program.
"This is the only full-service Hilton on Long Island, and the planned refurbishment will ensure that it retains its position as Long Island's leading business hotel," said Murray L. Dow II, DHC founder and CEO.
"This acquisition, our first in the Northeast, advances our nationwide growth plan, and is totally consistent with our strategy of acquiring well regarded hotels in top tier markets with high barriers to new entry."
The company currently operates in metro Portland, Seattle, Los Angeles, Sacramento, Chicago, Houston, San Antonio and Atlanta.
"Melville is a significant business address on Long Island that will become even more important next year when Canon's North and South American headquarters opens there," Dow noted.
The hotel boasts the largest ballroom, with banquet capabilities for 1,500 guests, and the most meeting space on Long Island.
"This property is a key player in the mid-island meetings market," noted CA Anderson, DHC's president. "With more than 26,000 square feet of flexible meeting space, including 18 well-appointed meeting rooms, it is a single location that is central to all of Long Island."
Located at 598 Broad Hollow Rd., in the heart of Melville's business district on the Interstate 110 corridor, the property is just 45 minutes from JFK airport, with easy proximity to New York City and the Hamptons.
The full-service hotel features several resort amenities, including both indoor and outdoor pools, a fitness center and tennis courts, as well as two restaurants.