Suites San Juan Hotel & Casino for $60 Million
|COVINGTON, Ky. - June 28, 2005 -- Eagle Hospitality Properties Trust,
Inc. (NYSE: EHP) today announced it has acquired the 299-suite Embassy
Suites San Juan Hotel and Casino in Isla Verde Carolina, Puerto Rico, for
$60.0 million. The all-suite hotel is located in the vibrant Isla Verde
Beach area. The property benefits from strong brand recognition in one
of the Caribbean's fastest growing resort markets and competitive positioning
as one of only two all-suite hotels in the San Juan market. The hotel will
continue to be managed by Hilton Hotels.
The Company funded the acquisition of the Embassy Suites San Juan Hotel and Casino with a portion of the net proceeds from the Company's Series A preferred stock offering completed earlier this month and proceeds from a bridge loan secured by the Company's recently acquired Hilton Glendale. The bridge loan, funded by Key Bank Capital Markets, is in the amount of $53.1 million and bears interest at a current rate of 5.06%. The Company anticipates refinancing this bridge loan with a longer term debt instrument.
The Embassy Suites San Juan Hotel and Casino opened in 1997. Situated in the preferred business and leisure section of the City of San Juan, the eight-story hotel features approximately 9,300 square feet of meeting space including a 4,400-square-foot ballroom. Additional amenities include a fitness center, 200-seat Outback Steakhouse Restaurant, two lounges and a business center as well as an outdoor pool complex that features an expansive freeform pool with waterfalls, tropical gardens, sundecks and thatch cabanas. The hotel also has an adjacent 6,000-square-foot casino operated by Hilton. Isla Verde Beach, a popular tourist destination, is less than two blocks from the hotel, and the Luis Munoz Marin International Airport, is five minutes away.
Bill Blackham, President and Chief Executive Officer of Eagle Hospitality, stated, "We are very excited about the acquisition of this hotel and the growth opportunities it presents. San Juan is an attractive lodging market which exhibits robust demand from both the leisure and commercial segments. One of only two all-suite hotels in the market, the hotel has demonstrated considerable improvement in results and penetration within the market since 2001. With strong occupancy trends and the positive impact in group-related bookings anticipated as a result of the new convention center opening late this year, we believe there is an opportunity to improve the revenue mix of the hotel. Additionally, we expect to enhance the overall results of the hotel through more proactive asset management of the property."
San Juan, the capital city of Puerto Rico, is the political base, economic powerhouse and cultural center of the island and is home to nearly one-third of Puerto Rico's four million in population. Puerto Rico has one of the most dynamic economies in the Caribbean region with companies specializing in pharmaceuticals, finance, electronics, textiles and agriculture. Since 1993, the tourism industry has rapidly become one of the leading drivers of the Puerto Rican economy. In fiscal 2004, Puerto Rico posted a record 1.4 million non-resident hotel registrations, up 10% over the 1.25 million registrants in fiscal 2001. Additionally, 1.4 million cruise passengers visited Puerto Rico in fiscal 2004.
Brian Guernier, Senior Vice President - Acquisitions, added, "The San Juan market has experienced exceptional growth since the government began a renewed focus on tourism in 1993. Having already overcome the closing of its old convention center in 2001, the San Juan hotel market is poised to accelerate even further with the late 2005 opening of the $400 million, 580,000-square-foot Puerto Rico Convention Center. The government has also created a new convention district that will include new retail, office and parking as well as a new pier that will be capable of docking two mega cruise ships at the same time. Together, we expect these favorable demand generators to create additional pricing power in an already strong market."
Eagle Hospitality Properties Trust, Inc. is a real estate investment trust focused on investment opportunities in the full-service and all-suite hotel industry. The Company owns 12 upper upscale full-service and all-suite hotels encompassing approximately 3,200 guestrooms. The hotels are located in Arizona, California, Colorado, Florida, New York, Kentucky, Ohio, Illinois and Puerto Rico.
Certain matters discussed in this press release, such as our expected operating performance and financing and acquisition activity, are forward-looking statements within the meaning of the federal securities laws.
Eagle Hospitality Properties Trust, Inc.
|Also See:||Eagle Hospitality Properties Trust Acquires the 351 room Hilton Glendale for $79.8 Million from Hilton Hotels Corporation; Hilton Will Continue to Manage the Hotel / June 2005|
|Eagle Hospitality Properties Trust Completes Acquisition of 270-room Embassy Suites Hotel Phoenix-Scottsdale for $33 Million / February 2005|