from FelCor for $63 million
|NEWTON,Mass. - April 6, 2006 -- Hospitality Properties Trust (NYSE:
HPT) today announced that it has purchased two hotels for $63 million.
The two purchased hotels are upscale Crowne Plaza Hotels in Miami and Philadelphia. These hotels have 749 rooms/suites and over 23,000 sq.ft. of meeting space. In addition, each of these hotels have exercise rooms/fitness centers, swimming pools, restaurants and lounges.
Property details are as follows:
Both of these hotels were purchased from FelCor Lodging Trust (NYSE: FCH).
Simultaneously with this purchase, HPT added these two hotels to a long term management contract with a subsidiary of InterContinental Hotels Group, plc (LSE/NYSE: IHG). This contract includes eight additional IHG branded hotels and has terms similar to other contracts entered by HPT, including: an initial term of 25 years, plus two consecutive 15 year renewal options; escrowed reserves for anticipated capital expenditures; subordination of management fees to the payment of defined minimum returns to HPT; and a limited guaranty from IHG for certain minimum returns to HPT. The eight hotel transaction was closed earlier this year and the purchase of the two hotels described herein was delayed until today while HPT completed diligence.
In addition to the purchase price, HPT will invest $7.1 million in these hotels during the three years following the closing to fund capital improvements. HPT's annual minimum returns for these two hotels, which are guaranteed by IHG, will be initially $5.04 million/year in 2006, increase to $5.6 million/year in 2007, $5.8 million/year in 2008 and approximately $6.0 million/year after the full $7.1 million of planned hotel improvements are funded. HPT may also receive additional non-guaranteed additional returns, a percentage of gross revenue increases at these hotels starting in 2008 and the net cash flows after payment of management fees to IHG.
The hotels have been purchased free and clear of all mortgage debt. HPT has funded this transaction by drawing under its unsecured revolving bank credit facility.
HPT also announced today that its previously announced acquisition of the 524 room Holiday Inn Sunspree Resort in Montego Bay, Jamaica for $30 million is still expected to close later in 2006. This hotel will be leased to IHG and the lease will be subject to cross guarantees and combined renewal options with the 10 hotel management agreement described above.
Hospitality Properties Trust is a REIT which upon completion of these transactions will own 310 hotels located in 38 states, Puerto Rico, Canada and Jamaica. HPT is headquartered in Newton, Massachusetts.
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND THE FEDERAL SECURITIES LAWS.
Hospitality Properties Trust
|Also See:||Hospitality Properties Trust Agrees to Purchase 9 Hotels for $196.2 Million; Seven Hotels Are Being Purchased from FelCor Lodging Trust and Two from InterContinental Hotels Group / January 2006|
|Hospitality Properties Trust Acquires the 195 room Harbor Court Hotel in Baltimore for Approximately $60 million; Signs Agreement with IHG to Manage the Hotel under the InterContinental Hotels and Resorts Brand / January 2006|