Jumeirah loses New York flagship property
Following the sale of Essex House Hotel, the prominent luxury hotel on prestigious Central Park South, by the Dubai Investment company to Strategic Hotels & Resorts for an alleged US$ 375 million, the new owners announced they have decided to terminate the management agreement with Jumeirah Hotels & Resorts and instead have signed a long term management agreement with Marriott Corp for the JW Marriott brand.
As part of the management agreement, Marriott will guarantee the net operating income of the Essex House hotel up to $21.5 million per year for a period of eight years, subject to a maximum funding by Marriott of $14 million in 2013 and $12 million in each year from 2014 to 2020. Total cumulative fundings by Marriott are capped at $40 million. Upon closing, Strategic Hotels plans to invest approximately $18.3 million in various property improvements, including renovations to various common areas, select systems upgrades as well as new signage and other branding efforts to distinguish the property under the JW Marriott flag.