TWO of London’s most fashionable hotels, the St Martins Lane and the Sanderson, are to be put up for sale with an estimated price tag of more than £100 million, The Times has learnt.
The hotels are owned jointly by Burford, the privately owned property company, and Ian Schrager, the US hotelier famous for his collaboration with Philippe Starck, the design guru. They are to be marketed by Jones Lang LaSalle, the property agent.
Morgans Hotel Group, which recently changed its name from Ian Schrager Hotels, confirmed last night that the two hotels would be “coming to the market shortly”, although Jones Lang LaSalle had yet to complete the sales memorandum.
But Niels Sherry, Morgan’s executive vice-president of operations, said the sale would have no effect on the company’s tenure. “Our intention is to maintain the operating contract,” he said.
He said that the decision by Morgans and Burford to sell was “opportunistic”, adding: “Buying and selling real estate is par for the course for the hotel business. Interest rates are low and hotel values are high and we wanted to take advantage of that situation.”
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He denied suggestions that Morgans was selling up to bolster its finances or because the two hotels were performing poorly, insisting that they had enjoyed a strong recovery from the dire trading conditions of the past three years. “As with our hotels in the States, we’re outperforming the market,” he said.
Mr Schrager is no stranger to financial problems. In 1978 his Studio 54 nightclub in New York was raided by the US Internal Revenue, which found rubbish bags full of cash, drugs and a duplicate set of accounts. Mr Schrager and his partner served a year in prison for tax evasion.
Last year he was forced to seek Chapter 11 bankruptcy protection over the Clift Hotel in San Francisco, although in July this year he resolved the problem by completing a sale and leaseback on the property. Earlier this month Morgans, which is majority owned by NorthStar, the US investment firm, further strengthened its finances by completing a $475 million (£265 million) recapitalisation.
For Burford, a sale of the London hotels would represent a further unwinding of the properties it owned when it was taken private in 2001.