Chicago-based luxury hotel owner Strategic Hotel Capital says it is acquiring the Ritz-Carlton Half Moon Bay for $124.4 million.
“This is a genuinely unique, high-end hotel with significant growth prospects located in a market with high barriers to entry.” Laurence Geller, Strategic Hotel Capital’s president and CEO, said in a press release. According to the press release, the hotel took 20 years to construct. Barriers to entry, indeed.
The resort is expected to earn about $8.1 million in 2004 and $10.4 million in 2005, before interest expense, taxes, depreciation and amortization, according to Strategic Hotel Capital. Translation: it’s still not making money. The buyer blamed the post 9/11 travel slump and recession, but suggested that it should do better as the economy recovers.
Strategic Hotel Capital owns 14 properties and completed an initial public offering June 24, raising $246.4 million. The company describes itself as “a real estate investment trust (REIT) which owns and asset manages high-end hotels and resorts” . Its hotels are operated by third-party management companies, according to Hoover’s.
