For facilitating the transaction, MHG received approximatelyUS$6 million in cash at closing based on excess working capitallevels at the joint venture. MHG says it could receive additionalconsideration based on the value of an interest rate hedge on theexisting joint venture debt in the event of a debt refinancing.

The hotels are known as Sanderson and St. Martins Lane. MHG saysthe transaction rice implies a gross value for the assets ofapproximately US$300 million.

MHG, owns and operates the Morgans, Royalton and Hudson hotelsin New York; Mondrian hotels in Los Angeles and Scottsdale, AZ;Delano and the Shore Club in Miami; Clift in San Francisco, and thetwo London hotels. This month, it acquired the Hard Rock Hotel& Casino in Las Vegas and related assets with an equitypartner. In addition, the company has other property transactionsin various stages of completion in Miami Beach and Las Vegas.