UPDATE 1-Morgans Group to sell Los Angeles hotel for $137 mln

Mon Apr 25, 2011 8:08am EDT

* To sell Mondrian in LA to affiliate of Pebblebrook Hotel

* Says will continue to operate hotel under 20-yr deal (Follows alerts)

April 25 (Reuters) - Morgans Hotel Group Co is to sell its Mondrian Los Angeles hotel to a unit of Pebblebrook Hotel Trust for $137 million, the latest in the boutique hotel operator's slew of asset sales as it works to pare its debt.

Morgans, which will continue to manage the hotel under a 20-year agreement, expects net proceeds of about $40 million from the sale, after using a part it to repay $103.5 million of the hotel's outstanding mortgage debt.

Earlier this month, the Morgans group said it would sell two mid-town Manhattan hotels to lodging real estate investment trust FelCor Lodging Trust Inc . [ID:nL3E7F41XT]

Reuters has also reported that the company, which had liabilities of $716.6 million as of Dec 31, has been shopping the Delano in Miami. [ID:nN15234445]

Shares of Morgans Hotel closed at $8.35 on Thursday on Nasdaq, while Pebblebrook shares closed at $8.35 on the New York Stock Exchange. (Reporting by Abhishek Takle in Bangalore; Editing by Saumyadeb Chakrabarty) ((abhishek.takle@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters messaging: abhishek.takle.reuters.com@reuters.net