Disposition of Non-Strategic Properties Intensifies Focus of REIT Portfolio Toward Luxury Resort and Upper-Upscale Segments
CNL Hotels & Resorts, Inc., the nation's second largest hotel real estate investment trust, announced that it has entered into an agreement to sell 30 hotel properties to an affiliate of Ashford Hospitality Trust, Inc. (NYSE:AHT) for $465 million, or approximately $107,400 per key at a net gain of $35.5 million after closing and related transaction expenses.
The sale price represents an 8.1 percent capitalization rate based on 2004 net operating income. The 30 hotel properties were acquired or developed by CNL Hotels & Resorts between 1999 and 2003, and represent four brands of Marriott International, Inc. in the select-service and extended-stay segments: Courtyard(R), Residence Inn(R), TownePlace Suites(R) and SpringHill Suites(R). Collectively, the properties include a total of 4,328 rooms in 16 states.
According to Thomas J. Hutchison III, CEO of CNL Hotels & Resorts, the sale will enable the REIT to capitalize on favorable lodging market fundamentals and further its strategy to actively recycle capital from non- strategic assets.
"Consistent with our investment philosophy, we believe this transaction will mark a significant step in our continued efforts to intensify our focus on the ownership and acquisition of 'distinctive lodging assets' primarily in the luxury resort and upper-upscale industry segments," stated Mr. Hutchison.
CNL Hotels & Resorts intends to use the proceeds from the sale, which is expected to close in June 2005, primarily to retire outstanding debt. The transaction is subject to customary closing conditions, and there can be no assurance that the sale will be completed.
About CNL Hotels & Resorts, Inc.
CNL Hotels & Resorts, Inc. owns one of the most distinctive portfolios in the lodging industry. With a focus on luxury resorts and upper-upscale properties, the company has approximately $6.3 billion in total assets with more than 130 hotels and resorts across North America that operate under independent brands and corporate brands such as Marriott, Hilton and Hyatt.
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