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NEWTON, Mass - Dec. 30, 1998--Hospitality Properties Trust
(NYSE:HPT) today announced it has agreed to purchase 17 hotels consisting
of two Marriott full service hotels, three Marriott Residence Inns, three
Marriott Courtyard hotels and nine Marriott TownePlace Suites hotels from
Marriott International (NYSE:MAR) for $201,720,000. All of these hotels
will continue to be operated by Marriott under a long-term lease through
at least 2013.
HPT acquired the first four of these properties yesterday. Four of the remaining thirteen hotels in this transaction are open and expected to be purchased during the first quarter of 1999. The remaining nine hotels are currently under construction and will be acquired by HPT and leased back to a subsidiary of Marriott International as they are opened during 1999. The 17 hotels contain a total of 2,665 rooms and are located in eight states: Virginia (5), Illinois (3), Georgia (2), Michigan (2), North Carolina (2), Missouri, South Carolina and Tennessee. John Murray, President of HPT commented: "HPT is pleased to expand its relationship with Marriott International. This new transaction includes HPT's first two Marriott full service hotels (1,000 rooms) and HPT's first investment in TownePlace Suites (939 rooms), Marriott's mid-priced extended stay brand. Our recent capital market activities have raised $338 million of debt and equity for our Company during the past six weeks. I am very pleased to report that we have been able to invest some of this capital so quickly in such high quality hotels. This transaction will have an immediate positive impact on HPT's cash available for distribution ("CAD"). "This transaction is consistent with our growth objective to increase HPT's cash flow from dependable and diverse revenue sources. With this transaction HPT has again increased our geographic diversity and brand diversity while maintaining the discipline for conservatively designed, long term portfolio leases. This transaction demonstrates HPT's growth capacity even in difficult capital market conditions." When all 17 hotels included in the agreement announced today are acquired,
the minimum rent payable by Marriott to HPT will be approximately $21.3
million per year. After a period to accommodate financial stabilization
of newly built properties, the leases provide for additional rent equal
to a percentage of gross revenue increases over a base year amount at these
hotels. During the stabilization period HPT's rent is guaranteed by Marriott
International. The lease is structured as a portfolio transaction so that
renewal options are exercisable only on an
More about HPT's first full service Marriott Hotels Both of the full service Marriott hotels HPT is acquiring are existing, well-performing hotels that are among the leading hotels in their market areas. Both have recently been substantially renovated and are subject to ongoing capital improvement plans to help them remain competitive. St. Louis Airport Marriott This 601 room hotel is located on approximately 12 acres at the I-70 exit for the Lambert International Airport, across the street from the Airport entrance. The hotel is comprised of two nine floor towers and three low rise buildings which create a courtyard for the hotel's pool and gardens. The property includes 20 meeting rooms totaling approximately 18,000 square feet plus three restaurants and a concierge floor. The property has been operated by Marriott International as a Marriott hotel since it opened. The St. Louis Airport Marriott is the leading hotel in the St. Louis Airport market due to its location, meeting capacity, and brand recognition. Nashville Airport Marriott This 399 room, 17 floor hotel is situated on 17 acres of land in High Ridge Business Park across I-40 from the Nashville Airport and only minutes from downtown Nashville and Opryland. The property includes 14 meeting rooms totaling approximately 17,000 square feet plus a restaurant and a concierge floor. The property has been operated by Marriott International as a Marriott hotel since it opened. The Nashville Marriott is the leading hotel in the Nashville Airport hotel market. Courtyard by Marriott and Residence Inn by Marriott HPT is pleased to add six newly developed Courtyard and Residence Inn hotels to its portfolio. Upon completion of these purchases, HPT will own 66 Courtyards and 34 Residence Inns. TownePlace Suites by Marriott TownePlace Suites, one of Marriott's newest hotel brands, is designed to attract longer-stay travelers. TownePlace Suites hotels contain studio, one and two-bedroom suites with fully equipped kitchens as well as a pool, exercise facilities and a guest laundry, all located in buildings designed to have a more residential appearance than a typical hotel. These hotels compete in the mid-priced segment of the extended stay market against such brands as Candlewood Hotels and Sierra Suites. HPT is a real estate investment trust headquartered in Newton, MA which invests in hotels which are leased to unaffiliated hotel operating companies. Including the transactions described herein, HPT will have investments and commitments totaling about $2 billion in 186 hotels in 35 states. |
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