Swissotel The Drake, New York for Approximately $586 million
|BETHESDA, Md., Feb. 15, 2006 - Host Marriott Corporation (NYSE: HMT)
today announced that in two separate transactions it has sold the Fort
Lauderdale Marina Marriott hotel ("Fort Lauderdale Marina") and that it
has reached a definitive agreement to sell the Swissotel The Drake, New
York ("The Drake"). The total gross sale proceeds from both transactions
are expected to approximate $586 million. The sale of the Fort Lauderdale
Marina closed on January 27, 2006 and the sale of The Drake is subject
to customary closing conditions and is expected to close in March. The
proceeds are expected to be used to partially fund the Company's pending
purchase of a portfolio of 38 hotels from Starwood Hotels & Resorts
The 579-room Fort Lauderdale Marina is a 25-year-old property that consists of a 273-room main tower and two low-rise wings. The hotel sustained significant property damage and business interruption from Hurricane Wilma, and currently is operating without the use of its main tower. Host expects to receive future insurance proceeds associated with these events, which could be meaningful, and will retain those proceeds under the terms of the sale of the hotel.
The Drake is a 495-room hotel located on the corner of Park Avenue and 56th Street in Manhattan that originally opened in 1927. Also conveying with the sale of the property are a small, adjacent building and certain other related assets.
Christopher J. Nassetta, president and chief executive officer, noted, "We are thrilled to announce the sales of the Fort Lauderdale Marina Marriott and The Drake New York. These strategic sales are indicative of the strategy we have articulated of capitalizing on value enhancement opportunities inherent in our world-class portfolio of real estate. The execution of these transactions also represents the first of our planned steps to finance the cash portion of our pending acquisition from Starwood."
The hotels' combined Earnings before Interest Expense, Taxes, Depreciation and Amortization (EBITDA) was forecast to be approximately $23 million for full year 2005, prior to the effect of Hurricane Wilma on the earnings of the Fort Lauderdale Marina (EBITDA equals combined GAAP operating profit of approximately $14 million plus combined depreciation expense of approximately $9 million). These sales will be incorporated into the Company's updated 2006 guidance that will be released in conjunction with the release of its 2005 earnings on February 23, 2006.
Host Marriott Corporation is a Fortune 500 lodging real estate company that currently owns or holds controlling interests in 105 upper upscale and luxury hotel properties.
This press release contains forward-looking statements within the meaning of federal securities regulations.
Host Marriott Corporation
|Also See:||Three Key Execs Appointed at Swissôtel The Drake, New York City / May 2005|
|The Fort Lauderdale Marina Marriott Hotel Cancels Room Blocks Amid Sale Speculation / January 2006|