RLH Corporation (NYSE:RLH) announced that it has entered into non-binding sale agreements for its Red Lion Hotel Atlanta Airport, Hotel RL Washington D.C. and Hotel RL in Salt Lake City for an aggregate $64 million in gross proceeds. The transactions, which are subject to due diligence, financing contingencies and customary closing conditions, are expected to close by year-end. The sales are part of the Company’s ongoing hotel asset disposition program.
Each of these properties are held in joint ventures, of which the Company owns 55%. Net proceeds to the Company will be used to repay property level and corporate level debt. The Red Lion Hotel Atlanta will not be retaining the Red Lion flag. It is anticipated that the Hotel RL Washington D.C. and the Hotel RL Salt Lake City will retain their Red Lion flag during a transition period, to be determined, as the new property owners pursue a change in use. In addition to these three agreements, the Company is continuing its process to secure the sale of the Red Lion Hotel Anaheim.
Greg Mount, Chief Executive Officer commented on the transactions, “We’re pleased to announce the impending sale of three of our joint venture properties, including Salt Lake City which is not currently being formally marketed. These transactions are a continuation of our real estate marketing and disposition program as we focus on our franchise and branding strategy. We are encouraged by the renewed interest in our remaining owned hotels and will continue to work to successfully close on those assets in a manner that maximizes their value.”
The Company is increasing its previously communicated expectation for net sales proceeds to $35 to $45 million from $30 to $40 million. The net proceeds range reflects RLH’s portion of the funds received upon completion of the sales for all of its owned hotels. While the Company is diligently pursuing the sales of its owned hotel assets, it can make no guarantees that the transactions will close.
Logos, product and company names mentioned are the property of their respective owners.