Morgans Hotel Group Co., New York City, announced on Monday that it has sold its Sanderson and St. Martins Lane hotels in London for £192 million (US$299 million) to Capital Hill Hotels Ltd. and other investors.
Morgans is a 50% owner of the hotels through a joint venture with an affiliate of Walton Street Capital. The transaction is expected to close in the fourth quarter and is subject to satisfaction of customary closing conditions. The joint venture partners received a £10 million (US$15.5 million) security deposit, which is non-refundable, except in the event of a default by the joint venture.
Cedar Capital Partners, London, will asset manage both hotels going forward and will oversee a £20 million (US$31 million) renovation.
Morgans will continue to operate the hotels under long-term management contracts. The terms of the management agreements, including extension options, have been extended to 2041 from 2027.
“Our continued management of these two great London assets and the proceeds from the sale will help provide the foundation for continued growth of our management business and brands around the world,” said Michael Gross, CEO of Morgans Hotel Group.
