in Baltimore for Approximately $60 million
Signs Agreement with IHG to Manage the Hotel under
the InterContinental Hotels and Resorts Brand
|NEWTON, Mass. - Jan. 6, 2006--Hospitality Properties Trust (NYSE: HPT)
today announced that it has acquired the Harbor Court Complex in Baltimore
Inner Harbor for $78 million.
The Harbor Court Complex is a mixed use development comprised of the five star, five diamond Harbor Court Hotel, a 72,042 square foot office building, and a 530 space seven story parking garage. The hotel has 195 guest rooms, including 22 suites, 8,000 square feet of meeting space, a roof top fitness center that includes a tennis court, squash court, indoor pool, aerobics center and spa therapy rooms. The Harbor Court Hotel is currently the only five star hotel in the state of Maryland and its five star, five diamond fine dining restaurant, Hampton's, is among the finest restaurants in the United States according to Conde Nast Traveler Reader's Poll, Gourmet magazine and Zagat Survey.
Simultaneously with this purchase, HPT entered into an agreement with InterContinental Hotels Group, plc (LSE/NYSE: IHG) to manage the Harbor Court Hotel under its InterContinental Hotels and Resorts brand. This hotel will be added to an existing agreement with IHG under which it manages thirteen other high quality hotels owned by HPT through 2029. HPT has also entered into a management agreement with an affiliate, Reit Management & Research LLC ("RMR"), to operate the office building and an agreement with InterPark Incorporated to manage the parking garage. IHG will not be directly concerned with the operations of the office building or the garage.
HPT's allocated purchase price for the hotel component of the Harbor Court Complex was $60 million. In connection with this transaction, HPT's guaranteed priority return from the amended 14 hotel management contract with IHG will increase by $4.8 million in 2006, $5.2 million in 2007 and $5.3 million thereafter. In addition to the guaranteed owner's priority returns, HPT may receive other cash flows available from the 14 hotels managed by IHG, including an increased owner's second priority return, percentage priorities based upon gross revenue increases and any remaining net cash flow after IHG management fees are paid.
HPT has agreed to invest up to $2.3 million over the next two years
in connection with the rebranding of the Harbor Court Hotel as the InterContinental
Harbor Court Baltimore. As these amounts are funded by HPT, the guaranteed
owner's priority return will increase.
The InterContinental Harbor Court Baltimore is located on Baltimore's Inner Harbor within walking distance of the downtown business district and popular attractions such as Camden Yards and the Baltimore Museum of Art. It is across the street from Harborplace, The Gallery, the Maryland Science Center and the National Aquarium.
The Harbor Court Complex was purchased by HPT free and clear of all mortgage debt. HPT funded this purchase by using cash on hand and drawing under its unsecured revolving bank credit facility.
HPT is a real estate investment trust, or REIT, which owns 299 hotels located in 38 states, Puerto Rico and Canada. HPT is headquartered in Newton, Massachusetts.
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND THE FEDERAL SECURITIES LAWS.
Hospitality Properties Trust
|Also See:||Developer of Baltimore's $250 million Ritz-Carlton Hotel Condo Project Sues Partner / July 2005|
|Hospitality Properties Trust Acquiring 13 Hotels for $450 million from InterContinental Hotels Group; Includes 4 InterContinental Hotels / December 2004|