TYSONS CORNER, VA-The 443-room Sheraton Premiere Hotel has traded to JBG Cos. for $84.5 million in cash. FelCor Lodging Trust sold the local holding as part of its larger national asset disposition strategy. The property, which was owned in a JV between FelCor and Starwood Hotel & Resorts Worldwide, will continue to be managed by Starwood Hotels & Resorts as a Sheraton under a long-term management contract. JBG Cos. did not return a call to GlobeSt.com in time for publication. Molinaro Koger represented FelCor in this transaction.
FelCor received $42.25 million in gross proceeds as there was no debt associated with the hotel. The company placed this hotel in its second wave of assets to go to market for several reasons, Stephen A. Schafer, vice president of FelCor’s strategic planning and investor relations, tells GlobeSt.com. For starters, he says, it was a very compelling price--at $191,000 per key it is trading at approximately 23 times trailing-twelve-month hotel EBITDA.
In addition, it is located in the suburban DC market, which is susceptible to new hotels. “The hotels that recently opened in the market are [charging] higher [rates] and what is coming online will be higher too,” Schafer says. “Also this hotel will be significantly impacted over the next three years because of all the construction that is going on in Tysons Corner, due to the metro.” Finally, he adds, it needs a significant infusion of capital for upgrades.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.
