Phoenix, AZ - Jan. 14, 1998
Starwood Hotels Resorts Trust (the "Trust"), a real estate investment
trust, whose shares are paired and trade
together as a unit (NYSE:HOT) with Starwood Hotels Resorts Worldwide, Inc. (the "Corporation", and together
with the Trust, the "Company" or "Starwood Hotels Resorts"), a hotel management and operating company,
today announced it has entered into definitive agreements to acquire four full-service, luxury properties located in Aspen, Colorado; New York City, New York; Washington, D.C.; and Houston, Texas, from several private
investors for a total purchase price of approximately $334 million. The portfolio consists of the 257-room ITT
Sheraton Luxury Collection Hotel Aspen; the 232-room ITT Sheraton Luxury Collection Hotel Houston; the
213-room ITT Sheraton Luxury Collection Hotel Washington, D.C. and the 214-room ITT Sheraton Luxury
Collection Hotel New York.
Under the terms of the agreements, the sellers will receive more than
half of the consideration in Starwood Hotels Resorts paired shares
and the remainder in cash. The cash portion of the purchase price will
be funded from Starwood's existing credit lines. The transaction is expected
to close before Jan. 31, 1998. It is anticipated that, pending the completion
of the ITT acquisition by Starwood Hotels Resorts, the properties
will continue to be managed by ITT Sheraton under the current management
agreements, which are terminable. The New York hotel is expected to be
immediately reflagged under the Westin name while the Washington, D.C.,
Houston and Aspen
properties are expected to remain under the ITT Sheraton Luxury Collection brand and are expected to be renamed as soon as the ITT transaction is completed.
"These are great real estate assets in terrific urban markets. We have been pursuing these assets for more than a year in a privately negotiated transaction in which there was no intermediary. It is the kind of transaction for which Starwood Hotels Resorts is known for and which has driven our shareholder value," said Barry S. Sternlicht, Chairman and Chief Executive Officer of Starwood Hotels Resorts Trust. "It represents a unique opportunity to acquire four one-of-a-kind luxury assets in markets where new construction of this quality is exceedingly costly or in which zoning is difficult to achieve.
"It is a tribute to the quality of these hotels and their owners that,
despite protracted litigation and the ensuing management turmoil, each
of these assets has maintained their reputations as among the finest assets
in their respective marketplaces. Indeed, each of these hotels were listed
in this month's issue of Conde Nast Traveler magazine's Gold List for 'Best
Places to Stay in the Whole World.' Based on a combination of rooms, service,
restaurant, and location/atmosphere, the Aspen property achieved the highest
rating of any hotel in the United States. Houston ranked as the finest
hotel in its market. Washington, D.C. ranked as number four and New York
ranked as number seven, not far behind ITT's St. Regis property in New
York. To my knowledge, there are no portfolios of this quality which are
uncumbered by management agreements available in the United States
"We are especially pleased to welcome the seller as new Starwood Hotels Resorts shareholders and value the vote of confidence their ownership represents. The Trust will own the hotel assets and the Corporation will operate them, both entities of which are owned by the same Starwood shareholder. By removing any conflict between manager and owner, a benefit of the paired-share structure, we can maximize the value of these assets for our shareholders, and lower the "risk profile" of the cash flow stream."
The Aspen Hotel, formerly the Ritz-Carlton, is ranked as the most upscale
hotel in the Colorado ski market and is
the largest structure in Aspen. The four-diamond, full-service luxury ski resort is located at the base of Aspen
Mountain in Aspen, Colorado, within walking distance of Aspen's shops, restaurants and entertainment facilities. The property benefits from leisure, individual and corporate group segment business.
The Aspen Hotel contains 257 guest rooms, including 24 suites, a kitchen,
two food and beverage outlets, a health and fitness center, business center,
an outdoor pool and spa, several retail outlets and 25,000 square feet
of meeting space, including a 9,700 square foot ballroom. The hotel can
be expanded through the completion of
construction on an additional 22 rooms in an adjacent structure that has not been completed.
The New York Hotel is ideally located in Midtown Manhattan along Central
Park South and is close to several
major demand generators and attractions such as the Lincoln Center, Carnegie Hall, Times Square, Fifth Avenue
retail, the Metropolitan Museum of Art, the Broadway theater district and Central Park. The hotel is a member of
Leading Hotels of the World and maintains a five-diamond and three-star rating from AAA and the Mobil Travel
The 25-story, luxury New York Hotel contains 214 guest rooms, including 36 suites and Club rooms, many offering unsurpassed views of the park and city, the Fantino restaurant and Bar and 5,000 square feet of meeting space. Guest services include 24-hour room service, fitness center and business services. The hotel was originally constructed in 1929 and completely remodeled in 1993.
With the addition of this hotel and the completion of the ITT transaction, Starwood Hotels Resorts will own eight hotels in the Manhattan market, providing significant operating efficiencies and making the Company the largest hotel owner in the nation's strongest lodging market.
"Most important, the Westin brand will return to New York with a premier property suitable for its upscale image," said Juergen Bartels, Chief Executive Officer of Westin Hotels.
The Houston Hotel, originally known as the Remington Hotel and built
by Caroline Hunt, is located minutes away from the central business district
and downtown Houston in the West Loop/Galleria area, one of the strongest
submarkets in Houston. The property benefits from this highly desirable location and is adjacent to numerous
corporate demand generators in the Westheimer corridor, the affluent River Oaks district, Interstate 610, and the
Galleria and Saks Pavillion retail centers. Other hotel demand generators in the region include the George R.
Brown Convention Center, NASA in Clear Lake, the Houston Medical Center, the Astrodome, Six Flags theme
park and Galveston Island.
The Houston Hotel contains 232 guest rooms, including 24 suites and 63 Club rooms each with floor-to-ceiling windows offering views of the park, the Galleria or downtown Houston skyline; two food and beverage outlets, The Dining Room and The Bar Grill, a lobby lounge and 11,050 square feet of meeting space. Guest services include a health and fitness center, a business center, 24-hour room service and several upscale retail shops.
The 213-room, Washington, D.C. Hotel, formerly the Ritz-Carlton, benefits
from a highly desirable location
bordering historic Georgetown on Embassy Row, at the intersection of 21st Street and Massachusetts Avenue,
and minutes to the White House, Kennedy Center for the Performing Arts and the upscale retail shops along
Connecticut Avenue. This property should benefit from operational synergies with Starwood Hotels Resorts' four other hotels located in the Washington, D.C. area.
Originally constructed in 1927, the recently refurbished eight-story
hotel contains 206 guest rooms, including 32 suites and 40 Club rooms each
with views of Embassy Row or Georgetown and the National Cathedral, two
food and beverage outlets and approximately 9,000 square feet of meeting
space. Guest services include 24-hour
room service and a fitness center.
Starwood Hotels Resorts Trust is the largest hotel REIT in the United
States. Shares of the Trust, which conducts substantially all of its business
as a general partner of SLT Realty Limited Partnership, are paired and
together with shares of Starwood Hotels Resorts Worldwide, Inc. Starwood Hotels Resorts Worldwide, Inc.,
which conducts substantially all of its business as managing general partner of SLC Operating Limited
Partnership, leases properties from the Trust and operates them directly or through third party management
Statements in this press release which are not historical may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Starwood Hotels Resorts believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from Starwood Hotels Resorts expectations include completion of pending acquisitions, continued availability of acquisitions, continued availability of capital at appropriate cost, foreign exchange fluctuations, performance of hotel operations, financial performance, real estate conditions, market valuations of its stock, execution of hotel renovation programs, changes in local or national economic conditions and other risks detailed from time to time in the Starwood Hotels Resorts SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K.)