in Arlington, Va. for $93 million
|ARLINGTON, Va. - April 6, 2004 -- MeriStar Hospitality Corporation
(NYSE: MHX), one of the nation's largest hotel real estate investment trusts
(REIT), today announced that it had signed a definitive agreement to acquire
the four-star, four-diamond Ritz-Carlton Pentagon City in Arlington, Va.
for $93 million. Located 10 minutes from downtown Washington, D.C., and
five minutes from Reagan National Airport, the 366-room luxury hotel will
be operated by Ritz-Carlton. The transaction is expected to close during
the second quarter, subject to customary closing conditions.
Ranked the best hotel in Washington D.C. by readers of Travel + Leisure magazine, the 18-story hotel adjoins the upscale Fashion Centre Mall, a mixed-use retail and office development in Arlington, Va., with Metro rail service to downtown D.C. at the property's front entrance. The hotel features nearly 18,000 square feet of meeting space, which can accommodate meetings of up to 900 guests.
"This is our first Ritz-Carlton property and is indicative of the type of high-end, urban properties with substantial meeting space that we are seeking to add to our portfolio," said Paul W. Whetsell, chairman and chief executive officer. "Washington D.C. is a very desirable hotel market, with high barriers to new competition, steadily growing demand and continued growth potential, especially as the hotel industry begins to rebound. The 2003 opening of the 2.3 million-square-foot Washington Convention Center also should have a significant positive impact on the local hotel market. The property is in great physical condition, and we expect to take full advantage of the area's very positive fundamentals. We continue to review a number of opportunities to acquire additional high-quality hotel properties."
Whetsell noted that the transaction will be accretive to 2004 earnings. "We were able to acquire this asset at a discount to replacement cost. This is a good stable cash flow asset with projected 2004 full-year EBITDA of $8.8 million." (EBITDA of $8.8 million equals operating income of $5.1 million plus depreciation expense of $3.7 million.)
Built in 1990, the hotel features a Club Level Lounge, fitness center, indoor lap pool and whirlpool, steam room and sauna, business center, restaurant and lounge, and such luxurious guestroom amenities as marble bathrooms, twice-daily maid service, plush terry bathrobes, dual phone lines, in-room fax and voicemail, high-speed Internet access and 24-hour room service.
Arlington, Va.-based MeriStar Hospitality Corporation owns 81 principally upscale, full-service hotels in major markets and resort locations with 22,236 rooms in 23 states, the District of Columbia and Canada. The company owns hotels under such internationally known brands as Hilton, Sheraton, Marriott, Westin, Doubletree and Radisson. For more information about MeriStar Hospitality Corporation, visit the company's Web site: www.meristar.com.
This press release contains forward-looking statements about MeriStar Hospitality Corporation, including those statements regarding future operating results, the timing and composition of revenues and expected proceeds from asset sales, among others.
MeriStar Hospitality Corporation
|Also See:||Hoyt Bacon and John Boettger Join MeriStar Hospitality Corporation in Senior Management Positions / March 2004|
|MeriStar to Spend Approximately $225 million On Renovations At Its Core 73 Hotel Properties Over the Next Two Years; Taking Advantage of Size and Scale to Accelerate Renovations and Reduce Costs / February 2004|