Pebblebrook Hotel Trust has taken a 49% stake in six New York City hotels owned and operated Denihan Hospitality Group as part of a new joint venture between the companies.
The transaction values the hotels—Affinia Manhattan, Affinia Shelburne, Affinia Dumont, Affinia 50, Affinia Gardens and The Benjamin—at approximately US$910 million. Comprising 1,640 guestrooms, the hotels are subject to US$600 million in existing first mortgage and mezzanine debt, and Pebblebrook will make a US$152 million equity investment in the joint venture in exchange for its 49% interest.The deal provides a major cash infusion to Denihan, which plans to use proceeds to accelerate its growth strategy in key urban U.S. markets. Denihan already has a presence in Chicago, Washington and Miami, and its brands include Affinia, The Benjamin and The James.Denihan will continue to own the remaining 51% interest in the joint venture, and the two companies will share all operating and financial decisions for the joint venture, and Denihan continues as the properties’ management company.Pebblebrook will fund the investment, which is expected to close by late September, with cash and borrowings from its credit facility. The hotels will be leased to a joint venture lessee owned by Pebblebrook and Denihan.The deal provides a major cash infusion to Denihan, which plans to use proceeds to accelerate its growth strategy in key urban U.S. markets. Denihan already has a presence in Chicago, Washington and Miami, and its brands include Affinia, The Benjamin and The James.
