Strategic Hotels & Resorts, Chicago, has acquired the 250-room Montage Laguna Beach in California from an affiliate of Ohana Real Estate Investors LLC for US$360 million. Montage will continue to manage the resort.
Strategic funded the acquisition, in part, through the issuance of nearly 7.35 million shares of common stock to an affiliated designee of the seller, priced at US$13.61 per share and an implied valuation of US$100 million. Strategic also assumed a US$150 million mortgage loan encumbering the property, priced at a fixed interest rate of 3.9% that matures in August 2021. The remaining portion of the purchase was funded with existing cash balances.
“The acquisition is consistent with our strategy of expanding our best-in-class portfolio of irreplaceable and world-class luxury hotels located in North America,” said Raymond Gellein, chairman and CEO of Strategic. “The opportunity to acquire a hotel of this prominence is exceptionally rare and we are delighted to work with the team at Ohana on this transaction as well as beginning what we believe will be a long and successful partnership with Montage.”
“We are excited to be working with Strategic Hotels & Resorts, who, as one of the leading luxury hotel owners in our business, share our ongoing commitment to the outstanding hospitality established at Montage Laguna Beach over many years,” added Alan Fuerstman, founder and CEO of Montage.