|BETHESDA, Md., Feb. 10, 1998 - Host Marriott (NYSE: HMT) today announced
that it has successfully acquired a controlling interest in the Atlanta
Marriott Marquis Hotel. As part of the transaction, the company
will invest $75 million in the Atlanta Marriott Marquis II Limited Partnership
in the form of a preferred equity contribution.
The 1998 EBITDA for the Atlanta Marriott Marquis is projected to be approximately $32 million, The investment was made as part of a recapitalization which included third party mortgage debt totaling $164 million at a fixed rate of 7.4% for a term of 12 years. This restructuring was approved by the limited partners in late December 1997.
Mr. Terence C. Golden, president and chief executive officer, stated, "We are extremely pleased to add this impressive hotel to our portfolio. This investment is another example of our strategy of acquiring large, urban hotels that are closely tied to major convention facilities and are in difficult-to- replace locations. The Atlanta Marquis Hotel benefits greatly from the strength of the Marriott brand name and Marriott's leadersship in managing convention hotels."
The Atlanta Marriott Marquis is the second largest hotel in the southeastern United States and is the city's premier convention hotel. The hotel, which is the newest of the Atlanta convention hotels, is located on approximately 3.6 acres of land in the heart of downtown Atlanta, the Peachtree Center area of Atlanta's central business district. The hotel is five blocks from the one million square foot convention center, which is currently under consideration for additional expansion. The Atlanta Convention Center is one of the top 1O convention centers in the country. The 1,671 room hotel includes 70 suites and contains over 122,000 square feet of meeting and exhibition space and five restaurants and lounges. The hotel was designed by John Portman and features a spectacular 50-story atrium that soars to an enormous rooftop skylight.
Mr. Golden added, "The Atlanta Marriott Marquis is an extraordinary hotel and should be a valuable addition to our high quality hotel portfolio. We are very pleased about completing this transaction. Our portfolio now includes 12 hotels each with over 700 rooms. The Marriott Marquis Hotel should continue to perform well as there are no new major hotels under construction in downtown Atlanta. Since it would take three or four years to build a competitive property and the replacement cost of this type of hotel would exceed $300 million, it is unlikely that any new similar hotels will be built in the near future."
Robert E. Parsons, Executive Vice President and Chief Financial Officer added, "The $199 million first mortgage bond financing, owned by a group of Japanese bond holders, originally matured earlier this year. Our Tokyo Treasury office, which has been open since 1992, assisted in the restructuring of the original financing and our investment in the property. Over the past four years, Host Marriott has acquired numerous hotels from Japanese owners and investors, which has been an important part of our growth strategy. Considering the recent economic developments throughout the Pacific Rim, we expect to continue to acquire additional quality full-service hotels from institutions and owners in Asia."
Host Marriott is a lodging real estate company which owns 96 upscale and luxury full-service hotels operated primarily under the Marriott and Ritz- Carlton brand names. Additionally, the company owns 31 senior living communities, all of which are managed by Marriott Senior Living Services, a division of Marriott International (NYSE: MAR). The company also serves as general partner and holds minority interests in various unconsolidated partnerships which own 241 lodging properties, 21 of which are full-service hotels.
Certain matters discussed within this news release are forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 and as such may involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of Host Marriott to be different from any future results, performance or achievements expressed or implied by such forward-looking statements. Although Host Marriott believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. These risks are detailed from time to time in the company's filings with the Securities and Exchange Commission.
For further information on Host Marriott Corporation, please visit the new website www.hostmarriott.com.
Geof Wendt of Host Marriott Corporation, 301-380-5694
Web site: http://www.hostmarriott.com