Marriott International on Friday confirmed rumors that it recently entered into a non-binding letter of intent for the sale of three Edition-branded hotels under development for approximately US$800 million.
The hotels are to be located in New York City, London and Miami Beach, Florida.
Marriott International, Bethesda, said this price is approximately equal to its expected total acquisition and development cost and that increases in estimated development costs would not result in higher hotel sales prices.
Marriott did not reveal the proposed buyer, which earlier this week The Wall Street Journal reported to be the Abu Dhabi Investment Authority, according to anonymous sources.
Marriott said that if the transaction goes forward, it expects each hotel sale would occur after construction is complete, with the company retaining long-term management agreements. Marriott anticipates completing construction of the London Edition within the next 30 days, the Miami Beach Edition in the second half of 2014, and the New York Edition in early 2015.
Marriott has stated a commitment of US$800 million to develop the Edition brand, an atypical move for the company that is primarily focused on managing hotels. However, Marriott said it may sell its Edition-branded properties to help fund the expansion of the lifestyle brand created with Ian Schrager.
The Edition brand has had a rocky start with only two Edition-branded hotels opened so far in Istanbul and Honolulu, and the Honolulu hotel has since rebranded amid legal acrimony between the hotel’s owner and Marriott.