Interstate acquired the three properties from affiliates of the Blackstone Group LP in an unusual structure: Interstate Hotels will solely own the Sheraton Columbia, a 288-room asset in the Maryland submarket. The firm paid $46.5 million for the property, a sum that is part of the total $118 million the JV paid for the three properties. A $12-million renovation program is expected to be finished by the end of next year.
The other two hotels, the 321-room Hilton Seelbach Louisville in Kentucky and the 226-room Crowne Plaza Madison in Wisconsin, were acquired through an 85%-15% JV with Investcorp International's US-based Real Estate Group. The minority partner, Interstate invested approximately $4.7 million for its equity interest in these properties, which will continue to be operated by Interstate under new management agreements.
Interstate funded the acquisitions with available cash and capacity under its senior revolving credit facility. This transaction represents the firm's seventh wholly owned property and two additional joint venture properties.
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