"Buying and selling real estate is par for the course for the hotel business," says Niels Sherry, Morgan's executive vice president of operations. "Interest rates are low and hotel values are high, and we wanted to take advantage of that situation."
He denies suggestions that Morgans was selling up to bolster its finances or because the two hotels were performing poorly, insisting that they had enjoyed a strong recovery from the dire trading conditions of the past three years. "As with our hotels in the States, we're outperforming the market," he says.
Last year he was forced to seek Chapter 11 bankruptcy protection over the Clift Hotel in San Francisco, although in July of this year he resolved the problem by completing a sale-leaseback on the property. Earlier this month, Morgans, which is majority-owned by NorthStar, the US investment firm, further strengthened its finances by completing a euro 393-million ($475 million) recapitalization.
As far as Burford is concerned, a sale of the London hotels would represent a further unwinding of the properties it owned when it was taken private in 2001. Jones Lang LaSalle is marketing them.
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