Millennium Partners Closes on $400 Million Portfolio Financing to Acquire Six Ritz-Carlton Hotels in New York, Boston and Washington, D.C
NEW YORK, Millennium Partners announced today that it has closed on a $400 million loan underwritten by Dresdner Bank Real Estate and DePfa Bank AG for the acquisition of six hotels (two in operation and four under construction) to be operated by The Ritz-Carlton Hotel Company, L.L.C. The properties are located in three of the country's most important hotel markets: New York, Boston and Washington, D.C.
According to Dresdner Bank and DePfa Bank, the following institutions have committed to participating in the transaction: The Royal Bank of Scotland plc, Hamburgische Landesbank -- Girozentrale, Landesbank Berlin -- Girozentrale, Norddeutsche Landesbank Girozentrale, Deutsche Postbank AG, Investkredit Bank AG, MidFirst Bank, Sovereign Bank and BNP Paribas.
The hotels are owned by MPE Hotel I LLC, an investment vehicle capitalized by subsidiaries of two major German insurance companies, Victoria, a subsidiary of ERGO, and Provinzial Lebensversicherungsanstalt der Rheinprovinz, both based in Duesseldorf, Germany, and the principals of Millennium Partners. TMW Immobilien AG of Munich served as investment advisors on this transaction.
The term of the facility is five years with a one-year extension option. The facility covers approximately 60% of the acquisition costs of the hotel portfolio, the balance of which will be funded by equity capital. The transaction benefits from a $100 million funding guarantee provided by Marriott International, Inc., which was designed to ensure that the hotel portfolio achieves certain minimum levels of cash flow. The loan will be drawn-down over a two-year period as the construction/renovation of each of the hotels is completed.
Christopher M. Jeffries, principal and founding partner of Millennium Partners, stated, "We are delighted to continue our relationship with Dresdner Bank Real Estate and look forward to a new partnership with DePfa Bank AG. Their ability to provide the funding through this unique financing vehicle for a portfolio of hotels in three of the strongest hospitality markets in the US clearly illustrates their confidence in Millennium Partners' management team and the financial strength of the two institutional investors, Victoria and Provinzial."
Johannes Boeckmann, Head of North American Real Estate at Dresdner Bank's Real Estate Division, added "We are extremely confident in the ability of Millennium Partners to develop the properties to the highest standards and The Ritz-Carlton Hotel Company L.L.C to manage them at the level that has established the company as one of the world's preeminent hotel operators."
The hotels that are included under the loan facility are: The Ritz-Carlton, New York (formerly The St. Moritz, 287 rooms) on Central Park South; The Ritz-Carlton, Downtown New York (298 rooms) in Battery Park City, on the southern tip of Manhattan; The Ritz-Carlton, Boston (180 rooms), the hotel company's original location on The Public Garden and The Ritz-Carlton, Boston Common (191 rooms) located across the Public Garden on The Common, within Millennium's mixed use development; The Ritz-Carlton, Washington, D.C. (300 rooms) in the West End and The Ritz-Carlton, Georgetown, (93 rooms).
The Ritz-Carlton Hotel Company, L.L.C. is a preeminent operator of luxury hotels in the world. Its hotels are ranked among the world's finest in numerous industry surveys and consumer publications. The company, which has been in business since 1983, is based in Atlanta, Georgia. The Ritz-Carlton manages 37 properties in 16 countries, with almost 40% of its properties located outside of North America and 17,000 employees worldwide. In 1999, the company won The Malcolm Baldridge National Quality Award, presented by the U.S. Department of Commerce, becoming the first and only hospitality organization to win this honor for the second time.
Millennium Partners is currently developing nearly $3 billion of mixed-use real estate in Boston, San Francisco, Washington D.C., Atlanta, Miami and New York. Headquartered in New York City, Millennium Partners has assembled some of the world's leading hoteliers, retailers, sports and entertainment companies, and financial institutions to create intelligent, large-scale urban developments that respond to a resurgent demand for dynamic city living. Millennium Partners has attracted prominent institutions and individuals as financial partners, including Goldman Sachs' Whitehall Fund; financier George Soros, his family and The Quantum Realty Holdings Limited; Citicorp Real Estate, Inc. and a consortium of German financial institutions led by ERGO Versicherungsgruppe AG.