CHICAGO-Strategic Hotels & Resorts, a real estate investment trust based here, is entering into a joint venture agreement with GIC Real estate Pte Ltd., the real estate arm of the Government of Singapore Investment Corp. Under the agreement, Strategic Hotels & Resorts is selling a 49% interest in the InterContinental Chicago and the Hyatt Regency La Jolla and will receive fees and incentives from Singapore.

“The government of Singapore pays us asset management fees and incentive fees based on the performance of the hotels,” says James Mead, EVP and CFO for Strategic Hotels & Resorts. “Strategic Hotels will also receive fees from “capital events such as the sale of the hotel or refinancing,” he says.

Strategic Hotels has had joint ventures before with Singapore before it became a public company and for hotels in Europe, Mead says. The InterContinental Chicago and the Hyatt Regency La Jolla had “always been identified to us as potential opportunity joint venture candidates,” he says. The hotels are in “great markets” and are not part of capital investment operational and marketing repositioning programs,” he says. The two hotels are valued at $450 million, Mead says. Earnings before interest, taxes, depreciation and amortization are expected to be $34.5 million for the two hotels in 2007.

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