RLH Corporation Executes Five Hotel Purchase and Sale Agreements
January 29, 2018 12:53pm
DENVER (January 29, 2018) — RLH Corporation (NYSE:RLH) today announced the execution of five hotel purchase and sale agreements resulting from the previously disclosed listing for sale of 11 company-owned hotels. The five sales are currently anticipated to close in February or early March, 2018, subject to standard contingencies and closing conditions.
The sale prices contracted on these five assets exceeded the company’s expectations. The real estate market conditions remain robust and RLH Corporation was able to negotiate pricing for these first five hotels reflecting single-digit cap rates. The company expects to maintain Red Lion Hotel franchises going forward on all five of the contracted hotels. Based on these contracts and the current negotiations for remaining hotels in the sales program, the company is happy to reiterate its expectation that aggregate pricing for the 11 hotels will be in the $165 million to $175 million range.
“As a key component of our transition to a high-growth franchise company, we are extremely pleased with the initial five contracted sales and the excellent market we are finding for our hotel sales program,” stated Greg Mount, RLH Corporation President and Chief Executive Officer. “We are confident that we will complete the majority of our hotel sales during the first and second quarters of 2018. These sales will allow us to significantly reduce our long-term debt and the expected gains on the assets sales will increase our cash reserves. This clean-up of our balance sheet will further enhance our very strong position as we pursue the aggressive growth of our franchise business.”
As the company closes on each individual hotel sale, it plans to disclose details that will allow shareholders and analysts to adjust their models to discontinue the earnings and cash flows from the disposed asset and to reflect the reduction in debt and increase to the company’s cash reserves.
In November, the company substantially modified its cost base in anticipation of completing most of its hotel sales in the first half of 2018 and making the transition to operating primarily as a franchise company. This resulted in anticipated annual expense reductions of $2.5 million. “We expect to initiate additional cost reductions as we sell hotels in 2018 to further bring our costs in line with typical franchise operations,” said Mount. “We expect franchise segment adjusted EBITDA margins to continue to improve during 2018.”
To learn more about franchising with RLH Corporation, visit franchise.rlhco.com.
Tags: rlh corporation,
Red Lion Hotels Corporation is an innovative hotel company doing business as RLH Corporation and focuses on the franchising, management and ownership of upscale, midscale and economy hotels. The company focuses on maximizing return on invested capital for hotel owners across North America through relevant brands, industry-leading technology and forward-thinking services. For more information, please visit the company's website at www.rlhco.com.
Contact: Investor Relations Contact - Amy Koch
Contact: Media Contact - Dan Schacter
Following a 2.5 Year, $20 Million Renovation Carter Hospitality Opens the Red Lion Hotel Lake Buena Vista South
Paramount Lodging Advisors Sells Washington Red Lion Hotel
Q2 U.S. Lodging Market Update
Hotel Investment News - Leisure Real Estate Advisors, LLC Announces the Sale of the Fairfield Inn & Suites, Downtown, Wichita, KS
RLH Corporation Closes Sale of Hotel RL Spokane at the Park for $35 Million
RLH Corporation Closes Sale of Red Lion Hotel Port Angeles for $19.5 Million
RLH Corporation to Debut Hotel RL in California With Development of Hotel RL Salinas
Coliseum Capital Management and Vindico Capital Acquire RLH Corporation Shares Previously Held by HNA Investment Management
RLH Corporation Promotes Paul Sacco to Executive Vice President, President of Global Development
Hotel Capital Acquires The Tremont Chicago Hotel at Magnificent Mile and Mike Ditka’s Restaurant
RLH Corporation Promotes Amanda Marcello to Senior Vice President of Brand Strategy
CBRE Hotels Arranges Sale of the West Inn & Suites Carlsbad
U.S. Hotel Deal Pace Going Strong
RLH Corporation Appoints Gary Sims Chief Operating Officer
Key Executives at RLH Corp. to Resign, Begin Consulting With Brand
RLH Corporation Closes Sale of Red Lion Hotel Templin’s on the River for $9.25 Million
RLH Corporation Opens The Island by Hotel RL in Fort Walton Beach, Florida Marking First Hotel RL Resort
RLH Corporation Closes Acquisition of the Knights Inn Brand From Wyndham Hotel Group
Avison Young Hospitality Group Discusses 2018 Hospitality Market Trends
AccorHotels Acquires Mövenpick Hotels & Resorts for U.S. $567 Million
Please login or register to post a comment.