"Each hotel is the finest in its market, with a premier downtown location and upscale, full-service hotel amenities," said Robert W. Boykin, chairman, president and chief executive officer of Boykin Lodging Company.
"These hotels fit well with our proven strategy of acquiring underperforming assets with significant value and excellent yield-creation potential. Both hotels will be accretive to Boykin's earnings and were acquired well below their replacement cost, which is currently estimated to range between $95,000 and $110,000 per room. Both hotels will also retain their franchise affiliations and be leased by Boykin Management Company."
In addition to concierge levels, indoor pools, and full-service restaurants, these hotels have ample meeting space (13,000 square feet in the Hilton and 10,000 square feet in the Radisson). Such amenities and meeting space allow each hotel to cater effectively to its major clientele: the furniture industry and the furniture marts in High Point and the business travelers and University of Tennessee visitors in Knoxville.
"The addition of these two excellent properties to our portfolio further
strengthens our presence in the
Southeast," Mr. Boykin said. "Each hotel is operating well below its market-share capacity in a market where no new additions to the competitive supply are on the horizon. Both hotels recently underwent significant renovations, so we expect to spend only half a million dollars on the Hilton and a quarter-million dollars on the Radisson over the next 18 months. With Boykin Management' s track record and the marketing power of Radisson and Hilton, we would expect annual yields in the range of 13 percent to 15 percent within the next three years."
"Our outlook for the full-service and resort segment of the hotel industry continues to be very positive," Mr. Boykin said. "This optimism was reflected in our recent announcement earlier today of a 4.4 percent increase in our annual cash dividend to $1.88."
"We continue to find outstanding opportunities by staying focused on executing our acquisition strategy," Mr. Boykin added. "Our acquisition pipeline is full with attractive assets which should further expand our multitenant relationships."
Boykin Lodging Company is a multitenant real estate investment trust
which focuses on the acquisition of
full-service, upscale commercial and resort hotels. The company currently owns 19 full-service commercial and resort hotels containing a total of 5,136 rooms located in California, Florida, Indiana, New York, North Carolina, Maryland, Minnesota, Missouri, Tennessee, and Ohio. Pending approval by shareholders is an agreement announced on December 31, 1997, under which the company would acquire from Red Lion Inns, L.P., ten full-service DoubleTree hotels containing 3,062 rooms in total.
This release contains forward-looking statements. Although the company believes its business plans are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the company's expectations include financial performance, real estate conditions, execution of hotel acquisition programs, changes in local or national economic conditions, and other similar variables.