Morgans Hotel Group

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Morgans Hotel Group
TypePrivate, 1984-2006
Publicly traded (NASDAQ: $MHG), Valentine's Day 2006-November 30, 2016
Private (2016-2017)
IndustryHotels, real estate development, hospitality, investments
Founded1984; 37 years ago (1984)
Headquarters475 Tenth Avenue
New York, NY, U.S.
Area served
Worldwide
(Doha, London, Istanbul, Los Angeles, Las Vegas, Miami, New York, San Francisco)
Key people
Ian Schrager,
Chairman, Founder, and CEO (1984-2005)
Jason Kalisman,
Chairman & Interim Acting CEO (2013-2015) representing grandfather, Alfred Taubman's interests
Lance Armstrong,
Board Member (2006)
Sam Nazarian,
CEO (2016-2017)
BrandsMorgans Hotel (1984)
Royalton Hotel
Paramount Hotel
Delano Hotel
Mondrian Hotel
Hudson Hotel
Delano Las Vegas Hotel
Clift
Sanderson Hotel
OwnerIan Schrager (1984-2006),
Alfred Taubman family (13%, ?-2016),
Ron Burkle (2009-2017),
SBE Entertainment Group/Todd Boehly (2016-2017)
Number of employees
2000 (2006 IPO)
Websitemorganshotelgroup.com

Morgans Hotel Group (NASDAQ: $MHG) was a global, publicly-traded hotel company founded by Ian Schrager, inventors of the boutique hotel category[1][2][3] with the 1984 opening of Morgans Hotel in New York City. MHG was listed on the NASDAQ exchange for over a decade.

History[]

1984-2006: Ian Schrager's Morgans Hotel: World's first boutique hotel[]

In 1984, Studio 54 cofounder, Ian Schrager and his business partner Rubell opened their first hotel, Morgans Hotel, named after John Pierpont (JP) Morgan's Morgan Library & Museum next-door. Designed by Andrée Putman, the instant hit introduced the boutique hotel category, becoming a "worldwide phenomenon."[1][2][3] It has triple-arched entrances that remain today.

Royalton Hotel & Paramount Hotel: Lobby socializing[]

Following the success of Morgans Hotel, they opened the well-received Royalton Hotel and Paramount Hotel, both designed by Philippe Starck. With these properties, Schrager introduced "lobby socializing" where the hotel lobby became a new kind of gathering place for hotel guests and New York City residents alike, and "cheap chic" was affordable luxury offered in a stylish, sophisticated environment.[4]

Delano Hotel & Mondrian Hotel: Urban resort[]

Schrager is also credited with inventing the "urban resort" with his Delano Hotel in Miami and Mondrian Hotel in West Hollywood, also designed by Starck.

Hudson Hotel et. al: Hotel as lifestyle[]

These were followed by the Hudson Hotel in New York, where he fully realized his concept "hotel as lifestyle" which he continued to refine, expanding to cities such as San Francisco with the Clift Hotel and London with St. Martins Lane Hotel and the Sanderson Hotel, all designed by the prolific Starck.

NASDAQ: $MHG IPO[]

In June 2005, Schrager sold most of his stake in Morgans Hotel Group to launch the Ian Schrager Company. Despite stepping down as Chair and CEO, he retained $4 million in consultant pay and perks through end of 2007.[5][6]

On Valentine's Day 2006, $MHG IPO'ed in a $360 million-target raise underwritten by Morgan Stanley, with Schrager cashing in his remaining 450,000 shares for another $9 million.[5] Lance Armstrong served as a Board Member at IPO, and Morgans Hotel Group was a publicly traded company on NASDAQ for over a decade.

2013: Ron Burkle vs. Alfred Taubman/Sothebys heir proxy war[]

2013 saw the lawsuit end of a proxy war for Morgans control between two billionaire interests:

  • Yucaipa, the investment alter ego of Ron Burkle, who loaned MHG $75 million in 2009 (during the recession),
  • vs. the Morgans Chairman and Interim Acting CEO, representing 13% majority interest of an investment vehicle for his grandfather, Alfred Taubman, owner of Sotheby's and Short Hills Mall, among other real estate interests.[7]

It had no permanent CEO to lead the company since 2013.[8]

2016-2017: Sam Nazarian's SBE Entertainment Group M&A[]

After years-long battle and board-rejected offers to buy MHG, Burkle partnered with Sam Nazarian's SBE Entertainment Group, who agreed to acquire MHG for $805 million, in a take-private transaction completed November 30, 2016.

Burkle converted his Morgans existing equity stake into a SBE ownership stake with a board seat. SBE also received investment from Cain international, a global real estate investment company headed by Todd Boehly and Jonathan Goldstein. [9] Nazarian retained majority ownership of SBE, remaining its Founder & CEO leading day-to-day operations. The son of Qualcomm board member and stakeholder Younes Nazarian (via M&A), Nazarian and SBE are better known as owners of LA lounges frequented by celebrity patronage and HBO's Entourage, appearing as himself in the "No Cannes Do" episode.

The merged company owned or operated over 20 hotels, including six properties under SBE's flagship SLS brand.[10]

2017-2018 closure: No. 237 (PE luxury condo conversion)[]

In July 2017, the building was purchased as private equity by Shel Capital and Kash Group, who closed Morgans Hotel and converted it to luxury condos in 2018, named No. 237.[3][11]

Portfolio[]

As an independent company before M&A, MHG owned and managed 14 hotels in Doha, London, Istanbul, Los Angeles, Las Vegas, Miami, New York, San Francisco comprising over 3,000 rooms. Each of its hotels was designed by a world−renowned designer:

New York

South Beach

Los Angeles

Las Vegas

  • Delano Las Vegas- opened in 2014 as a rebranding of THEhotel at Mandalay Bay, in partnership with MGM Resorts International.[13][14]

San Francisco

  • Clift

London

Doha

  • Mondrian Doha

Istanbul

  • 10 Karakoy A Morgans Original (2014) - located in historical, Eski Balıklı Han. The architectural work of the historical Büyük Balıklı Han has been undertaken by award-winning architect Sinan Kafadar – METEKS Group which used to be a hospital in 19th century.[18]

References[]

  1. ^ a b New York Media, LLC (22 July 1985). "New York Magazine". Newyorkmetro.com. New York Media, LLC: 28–39. ISSN 0028-7369. Retrieved 25 April 2013.
  2. ^ a b "Tracing The Boutique Artists Design Hotel". Circa Design.
  3. ^ a b c "Morgans Hotel: World's first boutique hotel by Ian Schrager awaits reopening as luxury micro-apartments".
  4. ^ Stodghill, Ron (19 August 2007). "A Hotelier Is Breaking the Mold Once Again". The New York Times. Retrieved 25 April 2013.
  5. ^ a b "Morgans serves cash to Schrager".
  6. ^ "Ian Schrager Checks Out, Cashes in with Morgans Hotel Group -- New York Magazine - Nymag".
  7. ^ "Ron Burkle finally acquires Morgans Hotel Group". December 2016.
  8. ^ "13 Reasons Why Morgans Hotel Group Was Desperately Seeking a Suitor". 23 June 2016.
  9. ^ "SBE Entertainment Concludes Morgans Hotel Acquisition". The Wall Street Journal. December 1, 2016. Retrieved January 29, 2017.
  10. ^ "SBE Entertainment to Acquire Morgans Hotel Group". The Wall Street Journal. May 9, 2016. Retrieved January 29, 2017.
  11. ^ https://www.no237madison.com/
  12. ^ "Morgans Hotel Group". Morgans Hotel Group. Retrieved 25 December 2018.
  13. ^ "The Hotel to be rebranded as Delano Las Vegas". Las Vegas Review-Journal. August 6, 2012. Retrieved 2012-08-07.
  14. ^ "The Delano Las Vegas". MGM Resorts International. Retrieved 12 September 2014.
  15. ^ "Morgans Hotel Group". Morgans Hotel Group. Retrieved 25 December 2018.
  16. ^ "Mondrian London At Sea Containers". Morgans Group LLC. Retrieved 12 September 2014.
  17. ^ "Tom Dixon to turn Sea Containers House into Mondrian Hotel". Design Week. Retrieved 3 January 2014.
  18. ^ "Morgans Hotel Group". Morgans Hotel Group. Retrieved 25 December 2018.

External links[]

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