Morgans Hotel Group is selling the Hudson New York and
the Delano South Beach, as the boutique hotelier looks to raise
cash and cut debt. The hotels are two of the company's three fully owned
properties.
Morgans acquired the 878-room Hudson in 1997 and spent
three years rebuilding it before reopening the property in 2000. The hotelier
has owned the 194-room Delano since 1995.
Founded by Ian Schrager (he sold his stake in 2005),
Morgans continues to try to solidify its financial footing amid years of
management shakeups and slumping performance.
Earlier this year, Morgans management was removed from
what was New York’s Mondrian SoHo by the owners (the property was renamed NoMo
SoHo) after a high-profile legal battle. Shortly thereafter, Morgans CEO Jason
Kalisman resigned less than two years after leading a shareholder proxy battle
that resulted in the ouster of the previous board of directors. That ouster was
brought on in part because of shareholder dissatisfaction in both the company’s
performance and its plans to sell the Delano.
The company, which manages or licenses 13 hotels, last
year hired Morgan Stanley to explore a sale of the company, and said earlier
this year that it was still in the midst of a strategic review.
In addition to the Hudson and Delano, Morgans owns the
Clift in San Francisco. For the third quarter, revenue per available room for those
three hotels fell 1.5% from a year earlier, as a 2.6% drop in average daily
rate more than offset a one-point gain in occupancy, according to Morgans’ SEC
filing of its third-quarter results.
Through September, Morgans narrowed its loss from a year
earlier by 30% to $39.2 million on lower operating, restructuring and
depreciation costs. Revenue fell 5.5%, to $162.7 million.