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BEVERLY HILLS, Calif. - Feb. 21, 2003 -- Hilton
Hotels Corporation (NYSE:HLT) announced today that the Hilton-CNL partnership
it formed with CNL Hospitality Properties, Inc. ("CNL") in December 2002
has completed the purchase of five additional hotels. The five properties
are:
Hilton contributed the Hilton Rye Town and CNL contributed the Doubletree Crystal City to the partnership. The partnership purchased all three Embassy Suites properties from Strategic Hotel Capital. Total consideration for all five hotels is approximately $249 million. The partnership financed a portion of the purchase price with a $145 million, 7-year first mortgage loan at a fixed rate of 5.95%. On December 24, 2002, the Hilton-CNL partnership acquired the 500-room Doubletree at Lincoln Centre in Dallas, Texas and the 428-room Sheraton El Conquistador Resort and Country Club in Tucson, Arizona for a total consideration of approximately $121 million. The Tucson property has been converted to the Hilton brand, and the Dallas property is in the process of being converted to a Hilton. Including anticipated refurbishment costs, the total capitalization of the partnership -- including all seven hotels -- is estimated at approximately $402 million. Hilton will generate net proceeds of approximately $30 million from the entire transaction, based on Hilton's investment in the partnership, contribution of the Hilton Rye Town to the partnership, and proceeds received from the acquisition financing. Hilton will use the $30 million net proceeds to reduce debt. CNL, one of the lodging industry's top acquirers of hotels, owns a majority interest in the partnership. Hilton, one of the world's leading hotel owners and operators, will operate all seven hotels under long-term management agreements and retain a minority interest in the partnership. "We are delighted to have completed this transaction with CNL," said Matthew J. Hart, executive vice president and chief financial officer of Hilton Hotels Corporation. "This transaction allows us to secure seven attractive long-term management contracts, increase our income from management fees, reduce our debt and expand our relationship with CNL. That's a home run in this environment." Hilton Hotels Corporation is recognized internationally as a preeminent hospitality company. The company develops, owns, manages or franchises more than 2,000 hotels, resorts and vacation ownership properties. |
Contact:
Hilton Hotels Corporation Marc Grossman, 310/205-4030 Kathy Shepard, 310/205-7676 http://www.hiltonworldwide.com |