Global private equity firm The Carlyle Group and Davidson Hotel Company today announced the sale of the 296-room Hilton Pasadena Hotel to a joint venture between The Amstar Group and Davidson. Jones Lang LaSalle Hotels arranged the sale on behalf of the sellers. Terms of the sale were not disclosed.
Carlyle and Davidson acquired the hotel in May 2004 and invested $5 million in a complete renovation of the hotel lobby, restaurant and guestrooms, as well as substantial improvements to the exterior areas. Davidson, which serves as property manager and oversaw the renovation, will remain an equity investor in the hotel. Post-closing, the hotel will remain a Hilton Hotel under a license agreement with Hilton.
Robert G. Stuckey, Managing Director and Head of Carlyle Realty Partners, said, "This investment is an excellent example of the types of hotel acquisitions we pursue. We invest in quality assets in supply-constrained markets and partner with superior management teams such as Davidson. Over the past 18 months, we were able to install the Davidson management team, renovate the hotel and increase hotel profitability by 50 percent."
Carlyle Managing Director Paul B. Brady said, "We have been a net investor in hotel assets since early 2004, and have since acquired, developed or redeveloped the Hilton Pasadena, the Hilton Garden Inn and Hampton Inn on New York's Eighth Avenue; the Hyatt Hotel in Fairfax, Virginia; the Colonnade Hotel in Coral Gables, Florida; the Westin Hotel in Annapolis, Maryland; and the Crowne Plaza at the United Nations in Manhattan. However, we continue to focus on returning cash to our investors by selling assets such as the Hilton."
John A. Belden, President and Chief Executive Officer of Davidson Hotel Company, said, "We are thrilled to be part of a team that continues to seek and find hotel acquisition opportunities across the country. The kind of association that has been created between Davidson and Amstar is exactly what's needed to succeed in the hospitality industry today. Together we have achieved terrific results and we expect that to continue at the Hilton Pasadena."
Arthur Buser, Managing Director for Jones Lang LaSalle Hotels in Los Angeles, said, "This is a smart acquisition for Amstar Group because of its tremendous upside potential in a market with extreme barriers-to-entry for new supply. The market has experienced a strong RevPAR growth over the past two years. With a shift in demand mix taking place in this submarket to higher-rated corporate and government demand in lieu of airline crew business, the outlook is even brighter in the near future. Amstar will benefit tremendously from this timely acquisition."
Source: The Carlyle Group