 CHICAGO,
Nov. 21, 2001 - Security Capital Group Incorporated (NYSE: SCZ)) announced
today that it has sold Homestead Village, its extended-stay lodging company,
to an affiliate of Blackstone Real Estate Advisors for a total value of
$740 million. The consideration received in the transaction includes $480
million in cash, the assumption of $145 million of liabilities, and the
issuance to Security Capital of a five-year $115 million note. The note
carries an initial coupon of 12% that increases by 100 basis points annually.
Net cash proceeds from the transaction, excluding the five-year note and
after transaction costs, are expected to be approximately $462 million.
| �The sale of Homestead is in keeping
with Security Capital�s stated intention to exit businesses that do not
fit the company�s current strategy,� said C. Ronald Blankenship, Vice Chairman
of Security Capital. �This strategy is to focus capital in six private
real estate operating divisions that will lead the industry in high sustainable
return on equity and earnings growth.� Mr. Blankenship noted that proceeds
from the sale will further enhance Security Capital�s liquidity. �This
transaction places the company in an even stronger position to execute
its strategy, as well as to fund additional share repurchases,� he said.
Salomon Smith Barney served as the financial advisor to Security Capital.
Bear, Stearns & Co. Inc. served as the financial advisor to Blackstone
and provided the mortgage financing for the transaction.
|
|
Security Capital Provides Update on Operating
Results for Homestead Village
CHICAGO, Sept. 25, 2001 - Security Capital (NYSE: SCZ
- news) announced today that occupancy levels for Homestead Village, its
extended-stay lodging division, were 70.1% for the week ending September
22, 2001. Occupancy levels for the quarter through September 22, 2001,
were 77.4%, compared to 83.3% for the same period in 2000. Average daily
room rates for the quarter to date declined 0.2%, resulting in a decrease
in revenue per available room (RevPAR) of 7.5% over the same period in
2000. Homestead's operating margin for the quarter to date was 57.9%, reflecting
the occupancy levels highlighted above and a focused expense management
program.
"Although Homestead's operating performance has been impacted
by the tragedy that took place on September 11, as well as by weaker economic
conditions overall, it has been affected to a much lesser degree than what
has been reported by other national operators in the lodging industry,''
said C. Ronald Blankenship, Vice Chairman. Homestead is focused on extended-stay
business travelers in local markets rather than convention business or
leisure travel, areas that have been severely impacted by recent events.
``Business guests make up approximately 80-82% of Homestead's room nights,
and no more than 14-16% of Homestead's room night stays are leisure-related,''
said
Mr. Blankenship. ``The effects of current conditions
have been moderated by Homestead's niche in extended-stay lodging and its
attractive price point compared to higher-end hotels.'' |
|
Security Capital is an international real estate operating company. The
company�s current strategy is to own all or a high percentage of six real
estate businesses that function as private operating divisions and to eliminate
the discount to the underlying value of its assets. Security Capital currently
has ownership positions in 10 real estate operating businesses with combined
assets of $16.8 billion, as well as a capital management division with
over $2.8 billion of assets under management. The company plans to reposition
or sell its investment in several of these businesses and focus its capital
in those that hold one of the top two market positions in their specific
niche and are able to create measurable brand value, as well as generate
significant income from services and managed capital. The principal offices
of Security Capital and its majority-owned affiliates are in Brussels,
Chicago, El Paso, Houston, London, Luxembourg, New York and Santa Fe.
Blackstone Real Estate Advisors (�BREA�) is an affiliate of The Blackstone
Group, a private investment bank with offices in New York and London. BREA
has raised four funds representing approximately $3.6 billion in total
equity. BREA has made more than 100 separate investments in hotels and
other commercial properties with a total transaction value exceeding $12
billion. In addition to real estate, The Blackstone Group�s core businesses
include Mergers and Acquisitions, Restructuring and Reorganization, Private
Equity Investing, Private Mezzanine Investing, and Liquid Alternative Asset
Management.
This press release contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of the safe-harbor provisions
of the U.S. federal securities laws. |
