13-Hotel FSA Portfolio
Thirteen of the 14 FSA hotels were acquired on February 13, 1998 and
include 3,081 guestrooms which are primarily located in Florida, California,
and New York. "Four of the hotels are irreplaceable Florida beachfront
locations; one is a destination hotel on Disney property; two of the hotels are in substantial business locations; and two are uniquely positioned in West Los Angeles," explained Steven D. Jorns, President and Chief Executive
Officer. The company expects that all the hotels will be affiliated with premium full-service brands to include Hilton, Courtyard by Marriott, Radisson, and Holiday Inn. The remaining FSA Hotel is expected to close by
Five of the FSA properties, while continuing to perform well and in
good physical condition, do not fit American
General Hospitality's strategic investment profile for various reasons and the company will sell them as a group or
Four-Hotel Portfolio in Robust BWI Market
The 815 guestroom portfolio, acquired on January 22, 1998, consists
of four hotels located in Alexandria, Va., Annapolis, Md. and Hanover,
Md. "The four Washington-area hotels fit our strategy of continuous
diversification and are excellent candidates to benefit from our proven product, operational and brand repositioning expertise," noted Jorns.
Holiday Inn O'Hare International Hotel
The Holiday Inn O'Hare International Hotel, acquired February 3, 1998,
is a 507-room hotel and convention facility in Rosemont, Ill., adjacent
to the world's busiest airport, O'Hare International. The hotel is
from the recently expanded Rosemont Convention Center and adjacent to the heavily promoted Rosemont Theater. The company expects to renovate the guestrooms and public areas of the hotel and add 242 guestrooms. Following the renovation and expansion, the company expects to upgrade the hotel to a
Holiday Inn Select or Crowne Plaza Hotel.
Expanded Unsecured Credit Facility
American General Hospitality closed its new unsecured $600 million credit
facility on February 13, 1998. The credit facility will be used principally
to fund the company's hotel acquisition and renovation programs.
unsecured nature of the facility allows the company great balance sheet flexibility and permits it to close transactions without the cost or delay of recording mortgages and the related additional legal expenses typically associated with secured facilities. In addition, the terms of the new facility are improved by, among other things, reducing its interest rate to a variable rate starting at LIBOR plus 140 basis points. "We are gratified that
our bankers have upgraded the facility to an unsecured status, reflecting their confidence in our proven ability to successfully implement our business strategy," said Jorns.
American General Hospitality's banking syndicate is led by Societe Generale,
Southwest Agency, Bank One,
Texas, N.A., Bank of Nova Scotia and Wells Fargo Bank, National Association.
American General Hospitality Corporation is a publicly traded real estate
investment trust (REIT) with a portfolio
of 66 hotels, owned and pending acquisition, in 22 states containing 15,159 guestrooms. Operating in major
markets, the company is focused on creating shareholder value through acquisitions, and product, operational
and brand repositioning.
Note: Statements in this press release which are not strictly historical
are "forward-looking" statements that are
made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks, which may cause the company's actual results in
the future to differ materially from expected results. These risks include, among others, competition within the
lodging and contract service industries; the relationship between supply and demand for hotel rooms and
vacation ownership resorts; the effects of economic conditions; issues associated with the acquisition and
renovation of existing hotels and the development of new hotels; operating risks; the historical cyclicality of the
lodging industry; risks associated with the dependence on franchisors of the company's lodging properties; and
the availability of capital to finance planned growth, as described in the company's filings with the Securities and