Hotel Online  Special Report

Hospitality Properties Trust Agrees to Purchase 9 Hotels for $196.2 Million; 
Seven Hotels Are Being Purchased from FelCor Lodging Trust and
Two from InterContinental Hotels Group
NEWTON, Mass - Jan. 25, 2006 -- Hospitality Properties Trust (NYSE: HPT) today announced that it has agreed to purchase nine (9) hotels for $196.2 million. 

The 9 hotels to be purchased include five (5) upscale Crowne Plaza Hotels, one (1) full service Holiday Inn Select Hotel, two (2) upscale, extended stay Staybridge Suites Hotels and one (1) Holiday Inn SunSpree Resort Hotel. These hotels have 2,712 rooms/suites and over 68,000 sq.ft. of meeting space. In addition, all of these hotels have exercise rooms/fitness centers and swimming pools and a total of 12 restaurants and 13 bars/lounge areas. These nine (9) hotels are located as follows: 

No. of Keys
Approx. Sq Ft
of Meeting Space
No. of Food &
Beverage Outlets
San Jose, CA  Crowne Plaza     304  6,643 sq.ft.  2
Atlanta (Airport), GA       Crowne Plaza 378 14,882 sq. ft. 2
Atlanta (Perimeter), GA    Crowne Plaza 296 21,004 sq. ft. 2
Dallas, TX   Crowne Plaza Suites 295 9,614 sq. ft. 2
Irvine, CA Crowne Plaza 335 7,476 sq. ft. 2
Housto, TX Holiday Inn Select 349 3,444 sq. ft. 2
Montego Bay, Jamaica Holiday Inn SunSpree Resort 524 4,200 sq. ft. 11
Dallas, TX  Staybridge Suites 114 460 sq. ft. 1
Las Colinas, TX Staybridge Suites 117 375 sq. ft. 1
Totals 2,712 68,098 sq. ft. 25
Seven of these hotels are being purchased from FelCor Lodging Trust (NYSE: FCH) and two are being purchased from InterContinental Hotels Group, plc (LSE/NYSE: IHG). 

Simultaneously with this purchase, HPT will enter a long term management contract for eight (8) of these hotels with a subsidiary of IHG. 

Because of tax law issues affecting the Holiday Inn SunSpree Resort in Jamaica, it will be leased to a separate subsidiary of IHG, but this lease and the management contract for the eight (8) hotels will be subject to cross guarantees and combined renewal options. 

The management contract and the lease will have terms similar to other contracts entered by HPT including: initial terms of 25 years, plus two consecutive 15 year renewal options; escrowed reserves for anticipated capital expenditures; subordination of IHG management fees to the payment of defined owner's priority returns to HPT; and a limited guaranty from IHG for the rent and certain priority returns to HPT. 

In addition to the purchase price, HPT will invest $25.1 million in these hotels during the three years following the closing to fund capital improvements. HPT's annual owner's priority payments, which are guaranteed by IHG, will be initially $15.8 million/year in 2006, increase to $17.8 million/year in 2007, $18.7 million/year in 2008 and approximately $19.0 million/year after the full $25.1 million of planned hotel improvements are funded. HPT may also receive additional non-guaranteed priority payments, a percentage of gross revenue increases at these hotels starting in 2008 and the cash flow remaining after payment of management fees to IHG at the managed hotels. 

The agreement announced today represents the first time HPT has agreed to purchase a hotel located in Jamaica. Jamaica and most other countries generally do not provide the full tax benefits available to real estate investment trusts, or REITs, in the USA. Nonetheless, HPT expects it may reduce its taxes due in Jamaica through 2015 as a result of certain tax concessions granted by the Government of Jamaica to promote investment in its tourism industry. Also, to reduce the risks to HPT which may arise from changes in currency exchange rates, the purchase price and the rent for the Jamaica hotel were set and will be paid in U.S. dollars. 

The hotels will be purchased free and clear of all mortgage debt. HPT expects to fund this transaction by drawing under its unsecured revolving bank credit facility. 

The transactions announced were effective Friday, January 20, 2006, except for the Jamaican resort which will be delayed pending certain third party approvals, such as Jamaican tax and regulatory approval. 

Hospitality Properties Trust is a REIT which upon completion of this transaction will own 308 hotels located in 38 states, Puerto Rico, Canada and Jamaica. HPT is headquartered in Newton, Massachusetts. 




Hospitality Properties Trust
Timothy A. Bonang, 617-964-8389
Manager of Investor Relations

Also See: FelCor Identifies 38 Hotels for Sale, Expects Proceeds of Between $500 million and $550 million; The New FelCor Will Own 90 Hotels / January 2006

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