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MeriStar Hospitality Corporation Acquires the
484-room Marriott Irvine for $92.5 million 

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ARLINGTON, Va., June 28, 2004 — MeriStar Hospitality Corporation (NYSE: MHX), one of the nation’s largest hotel real estate investment trusts (REIT), today announced that it had completed the acquisition of the Marriott Irvine for $92.5 million.  The 484-room landmark hotel will be operated by Marriott International under a long-term contract. 
 
“Irvine/Orange County is one of the best performing markets in the U.S.,with excellent growth potential going forward,” said Paul W. Whetsell, chairman and chief executive officer.  “The Hilton/Irvine Orange County Airport, which we also own, has been one of our strongest performing hotels this year with first quarter RevPAR growth of 21 percent.” 

The company expects to invest approximately $7.5 million in property improvements over the next 12 months, primarily in the hotel’s guest rooms.  All of the hotel’s 30,000 square feet of meeting space, five food and beverage outlets, and lobby and public spaces underwent a multi-million dollar renovation within the 


Marriott Irvine
18000 Von Karman Avenue
Irvine, California
past 18 months. 

The company financed a portion of the acquisition with a $55.5 million fixed-rate mortgage provided by Connecticut General Life Insurance Company.  The seven-year term loan carries an interest rate of 5.69 percent.  “We continue to take advantage of the current low interest rate environment by using mortgage debt to finance a modest portion of the acquisition costs, which also reduces our average borrowing costs and improves our equity yields,” said Donald D. Olinger,  chief financial officer.  “We remain selective acquirers of larger properties, located in major urban markets or high-end resort destinations with high barriers to entry, strong brand affiliations and significant meeting space, acquisitions that also will be accretive to earnings.”

Arlington, Va.-based MeriStar Hospitality Corporation owns 79 principally upscale, full-service hotels in major markets and resort locations with 22,186 rooms in 23 states and the District of Columbia.  The company owns hotels under such internationally known brands as Hilton, Sheraton, Marriott, Ritz-Carlton, Westin, Doubletree and Radisson. 

This press release contains forward-looking statements about MeriStar Hospitality Corporation, including those statements regarding future operating results, the timing and composition of revenues and expected proceeds from asset sales, among others. 

Contact:
MeriStar Hospitality Corporation
Bruce Riggins
VP, Strategic Planning & Analysis
(703) 812-7223
www.meristar.com

 
Also See: MeriStar Hospitality Completes Sale of Five Hotels for Aggregate $29.5 Million / March 2004
MeriStar to acquire the Ritz-Carlton Pentagon City in Arlington, Va. for $93 million / April 2004


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