Morgans Group to sell Los Angeles hotel for $137 million

Mon Apr 25, 2011 8:13am EDT

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(Reuters) - Morgans Hotel Group Co (MHGC.O) is to sell its Mondrian Los Angeles hotel to a unit of Pebblebrook Hotel Trust (PEB.N) 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 (FCH.N).

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.

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)

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