Dublin-based private equity group Claret Capital has acquired a 90 per cent stake in the prestigious five-star St Regis Hotel in Washington DC. The sale price was not disclosed but is thought to be about $170 million (€121 million).
This would mark a significant increase in the value of the property, which was sold in August 2005 by Starwood Hotels & Resorts for $47 million to a joint venture between Brickman and New Valley Corporation, both US-based specialist real estate investors.
Since then, about $80 million has been invested in a refurbishment programme at the hotel, which has been closed for business since late 2005.
Claret completed the deal in an off-market transaction earlier this month. Brickman has retained a 10 per cent stake in the business.
Situated just two blocks from the White House, the St Regis is considered the grand old dame of hotels in the US capital.
It was opened in 1926 by the then president Calvin Coolidge and has been visited by every American president since then.
The hotel traded as the Carlton until 1999 when it was given the upmarket St Regis brand. Claret, which is run by Clare-born entrepreneur Domhnal Slattery, hopes to reopen the hotel in December, in time for the busy Christmas and New Year period and it will be operated by Starwood.
It should also benefit from the run-in to the US presidential elections next year. The hotel will have 183 bedrooms, 33 of them suites. It will also have a spa, and a bar and restaurant that will be run and managed by a Michelin star chef.
This represents Claret's second investment in a hotel asset. Earlier this year it was part of a consortium led by Merrill Lynch that paid more than $350 million to buy a stake in a company that owns Macau Landmark and Macau Fisherman's Wharf.
The complexes include a five-star hotel, a convention centre, retail shops, restaurants and casinos.
Mr Slattery said Claret would consider other hotel acquisitions in the US at the top end of the market. "We will look at the US market and consider whatever other acquisition opportunities arise in the five-star market," he said.
Mr Slattery said Claret viewed this as a "minimum" five-year investment and he is confident that it can achieve an annual 15 per cent internal rate of return for the group.
"The market in Washington DC is very buoyant and we believe there will be dramatic growth there over the next three to four years," Mr Slattery said.
Claret manages investments on behalf of a number of families and wealthy individuals. These are thought to include Senator Feargal Quinn and Tony Ryan.
The group is an investor in JetBird, a low-cost executive jet airline that will take off in 2009, and Irish television station Channel 6.
The Washington St Regis was listed on the National Register of Historic Places in 1991.
