Dubai Investment Group has said the time was right to sell Jumeirah Essex House, its New York luxury hotel, despite making a $61m loss on the deal.
Chicago-based Strategic Hotels & Resorts on Saturday confirmed an agreement with Dubai Investment Group to buy a luxury New York hotel for $362.3m to be rebranded JW Marriott.
The purchase price included 509 hotel rooms, nine condominium units and significant hotel-level cash reserves, it said.
Dubai Investment Group bought the Essex House in 2005 for $423.9m, according to real estate research and information company Real Capital Analytics.
The transaction, which is subject to the satisfaction of customary closing conditions, is expected to close on or before September 7.
A spokesman for the Dubai Investment Group told Hotel News Now that the time was right for the company to part ways with the Essex House.
“We constantly review our portfolio of assets and considered now was a timely opportunity to capitalise on the repositioning and the operational improvements we have made,” he was quoted as saying.
Strategic Hotels said it has also signed a 50-year management agreement with Marriott International to rebrand the hotel as the JW Marriott Essex House New York.
The trade worked out well for Strategic, said Diane Morefield, its executive VP and CFO, and it will continue to be a beneficial deal for the company.
“We’re buying it at $700,000 a key... Between what other high-end hotels are being sold at and what other hotels are being built at, we’re getting this at a very attractive price,” she told Hotel News Now.