Tourism Industry News
Morgans Hotel Group Joint Venture Successfully Amends and Extends Mondrian South Beach Debt
New York (PRNewswire-FirstCall/WorldTourismNews) - Morgans Hotel Group Co. (NASDAQ:MHGC) ("MHG"), the operator and part owner of the Mondrian South Beach joint venture, today announced that the joint venture has successfully amended the non-recourse financing secured by the property and extended the maturity date for up to seven years until April 2017. Mondrian in South Beach, which opened in December 2008, is both a hotel and residences.
Among other things, the amendment allows the joint venture to accrue all interest for a period of two years and a portion thereafter and provides the joint venture the ability to provide financing to qualified condo buyers with up to 80% of the condo purchase price.
The amendment also provides that approximately $28 million of the joint venture investment in the property is elevated in the capital structure to become, in effect, on par with the lender's mezzanine debt so that the joint venture receives at least 50% of all returns in excess of the first mortgage. The first mortgage has an outstanding balance of approximately $70 million.
"These amendments and the extension highlight the confidence the lender has in this property and its long term business prospects. The lender also recognizes the critical nature of Morgans' involvement to the success of Mondrian and granted us the right to extend for a long term while accruing interest if necessary, and at the same time, allowed us to advance a portion of our investment in the capital structure so that we can earn a return sooner," said Marc Gordon, President of Morgans Hotel Group. MHG operates the Mondrian South Beach property under a long-term management contract.
About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ:MHGC) is widely credited as the creator of the first "boutique" hotel and is a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. For more information please visit www.morganshotelgroup.com.
Forward-Looking and Cautionary Statements
This press release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of our investments and financing needs. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "expect," "anticipate," "estimate" "believe," "project," or other similar words or expressions. These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ materially from those expressed in any forward-looking statement. Important risks and factors that could cause our actual results to differ materially from those expressed in any forward-looking statements include, but are not limited to economic, business, competitive market and regulatory conditions such as: a sustained downturn in economic and market conditions, particularly levels of spending in the business, travel and leisure industries; continued tightness in the global credit markets; general volatility of the capital markets and our ability to access the capital markets; our ability to refinance our current outstanding debt and to repay outstanding debt as such debt matures; our ability to protect the value of our name, image and brands and our intellectual property; risks related to natural disasters, such as earthquakes and hurricanes; hostilities, including future terrorist attacks, or fear of hostilities that affect travel; and other risk factors discussed in MHG's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and other documents filed by MHG with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of the date hereof, based upon information known to management as of the date hereof, and MHG assumes no obligations to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.
Source: Morgans Hotel Group Co.
CONTACT: Jennifer Foley, Vice President of Public Relations, Morgans
Hotel Group, +1-212-277-4166, email@example.com
Web Site: https://www.morganshotelgroup.com/