|WASHINGTON, June 2, 1999 - LaSalle Hotel Properties
(NYSE: LHO) today announced the acquisition of the Hotel Viking in Newport,
Rhode Island, for $28 million. LaSalle purchased the 182-room property
from Bellevue Properties Inc., which will continue to operate the hotel.
The sale also included the fully restored historic Kay Chapel and Trinity
Parish House, both adjacent to the hotel, as well as a 12-room inn located
directly across the street. LaSalle Hotel Properties will lease the hotel
and adjacent properties to Viking Hotel Corporation, an affiliate of the
LaSalle Hotel Properties also announced an $8 million property expansion and renovation plan targeted for completion by the Spring of 2000. Construction will commence this fall to add two floors with 36 guest rooms to the East Wing, increasing the hotel's total room count to 230. Plans are also underway to refurbish all guest rooms, the lobby, public corridors, meeting rooms, the restaurant and exterior facade.
"Our goal is to continue to restore this historic landmark and to build upon the Viking's status as a unique meeting and leisure resort," said Michael Barnello, Chief Operating Officer of LaSalle Hotel Properties. "The marketing of the recently redeveloped Kay Chapel for weddings and various group functions offers additional upside opportunity. The Parish House provides an untapped development opportunity for additional rooms, meeting space, or a spa."
Originally constructed in 1850, the Hotel Viking is a full-service upscale
resort located on Bellevue Avenue in Newport, a resort area that is rapidly
becoming a year-round hotel market. The property, which recently became
a member of Historic Hotels of America, offers 29,000 square feet of meeting
space, two restaurants, a lounge and "The Top of Newport," a rooftop bar
with excellent views of Newport Harbor.
Newport has one of the highest daily rates in New England and is one of the most dynamic hotel markets in the United States. "The Hotel Viking is exactly the type of asset that matches our strategic goal of acquiring upscale resorts in strong markets with extremely high barriers to entry," said Jon Bortz, President and Chief Executive Officer of LaSalle Hotel Properties. "Our renovation and expansion plans will further capitalize on the strength of Newport's hotel market, where lodging demand continues to grow."
The Hotel Viking had strong performance gains in 1998, when the average daily rate (ADR) grew by 8.2 percent to $113.27 from the previous year; occupancy increased approximately one percent to 72.7 percent; and room revenue per available room (RevPAR) was up 9.2 percent. In 1999, performance gains have continued, with the Hotel Viking's ADR increasing to $71.66 in the first four months from $63.52 in the same period of 1998.
Occupancy was up nearly five percent and RevPAR increased 23 percent over the same period of 1999. According to Smith Travel Research, Newport's hotel market achieved 69.4 percent occupancy in 1998, up one percent over 1997, and had ADR of $139.03, a 6.5 percent increase. RevPAR in Newport rose approximately 8 percent to $96.49 in 1998.
"The Viking is a tremendous property which offers strong current performance, compelling economic returns and significant upside potential through expansion, renovation and repositioning," added Mr. Barnello. "Newport is also a strong market that is fast becoming a year-round leisure destination in part due to its status as the 'Sailing Capital of the World,' its legendary mansions such as Rosecliff, where "The Great Gatsby" was filmed, year-round festivals, and the Tennis Hall of Fame."
While Newport, home of many "America's Cup" winners, has always had extremely strong summer seasons, events such as "Christmas in Newport" and "Winter Festival" have helped increase full year occupancy to just below 70 percent in 1998, with the trend toward further increases. Newport also has extremely high barriers to entry, given the difficulty of building, the historic nature of the town and lack of available land.
As a result of the recent completion of a $350 million expansion at the T.F. Green Airport, which is serviced by nine major airlines, and the widening of Route 138, access to Newport continues to become more convenient. In addition, the expected completion this fall of Amtrak's Kingston station upgrade, near Newport, will offer high speed transportation from Boston, New York and Washington D.C.
LaSalle Hotel Properties is a leading multi-tenant, multi-operator real estate investment trust (REIT) which, with the purchase of the Hotel Viking, owns 13 upscale and luxury full-service hotels, totaling more than 4,300 guest rooms in 13 markets in ten states. LaSalle Hotel Properties is focused on investing in upscale and luxury full-service hotels located primarily in major business and urban, resort and convention markets. LaSalle Hotel Properties seeks to grow through strategic relationships with premier internationally recognized hotel operating companies including Meridien Hotels Resorts, Marriott International, Inc., Radisson Hotels International, Inc., Hyatt Hotels Corporation, Durbin Companies, Outrigger Lodging Services and Noble House Hotels Resorts.
The REIT serves as the exclusive vehicle for Jones Lang LaSalle's hotel investment activities in the United States. Jones Lang LaSalle (NYSE: JLL) is the world's leading real estate services and investment management firm with more than $20.5 billion of assets under management and operating across 96 key markets in 34 countries on five continents.
Statements in this press release regarding, among other things, future financial results and performance, achievements, plans and objectives may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance, achievements, plans and objectives of the Company to be materially different from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include those discussed under "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosure About Market Risk" and elsewhere in the Company's annual report on Form 10-K for the year ended December 31, 1998, under "Certain Relationships and Related Transactions" and elsewhere in the Company's proxy statement with respect to the annual meeting of shareholders held on May 19, 1999, under "Risk Factors" and elsewhere in the Company's prospectus filed as part of its registration statement (333-45647) and in other periodic reports filed with the Securities and Exchange Commission. Statements speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in Company expectations or results, or any change in events.
|Also See:||LaSalle Hotel Properties Reports RevPAR Increase of 6.8 percent for the YE 1998 versus 1997 / Jan 1999|