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Advantageous To Buyer . Analysis by UNITE HERE Advises Prospective Buyers to be Fully Aware of Facts Before Considering an Acquisition from Eagle Hospitality October 16, 2006 - Hotel REIT Eagle Hospitality Properties (NYSE: EHP) may be selling at least one Midwestern hotel in the near future- under circumstances that could be very advantageous for prospective buyers, according to an analysis completed by UNITE HERE. Key to UNITE HERE�s findings is the fact that Eagle may sell at least one hotel prior to January 17, 2007 in order to avoid paying capital gains tax on a disposition. The Company purchased the Embassy Suites Boston at Logan International Airport in July, 2006 and identified the hotel as a replacement property under Section 1031 of the Internal Revenue Code. To complete the tax-free exchange, Eagle must sell a like-kind property within 180 days in order avoid capital gains tax on the sold property. �A timely sale is critical to Eagle securing the substantial tax savings,� said Kirsten Isaacson, Research Analyst with UNITE HERE, �Before settling on an acquisition price we think that prospective buyers should be fully aware of the facts.� Because Eagle�s portfolio is heavily concentrated in the Midwest it�s likely that they will sell a Midwest property in order to help diversify their portfolio. Multiple stock analysts have speculated that Eagle will sell one of the following properties:
Commonwealth is viewed as an affiliated manager. Eagle�s Chairman, Mr. William Butler, is also the Chairman and majority owner of Commonwealth. Prior to Eagle�s IPO, the two companies, both controlled by Mr. Butler, entered into a �strategic alliance� agreement under which Commonwealth has a general �right of first refusal� to operated any future hotels acquired by Eagle. For more information regarding UNITE HERE�s research into hotel dispositions by Eagle Hospitality Properties, please call 866-678-6741. 1. Eagle Hospitality Properties 10-Q filed with the SEC on August 7, 2006. Page 21. 2. According to Eagle�s Registration Statement, Commonwealth does not have a �Right of first refusal� if �the acquisition opportunity was not known to us and has been brought to us by another management company or a majority of our independent directors decides in good faith for valid business reasons to use another management company.� |
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Kirsten Isaacson
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