Felcor Agrees To Sell Six Non-Strategic Hotels
Continues successful execution of its portfolio disposition program | Proceeds will be used to reduce debt and pay accrued preferred dividends
FelCor Lodging Trust Incorporated (NYSE: FCH) today announced that it has agreed to sell six non-strategic hotels for $103.0 million, in the aggregate, to an undisclosed buyer. The purchaser has paid a $3.9 million hard money deposit toward the purchase price. The transaction is expected to close late in the second quarter. As part of its long-term portfolio repositioning strategy, which includes the sale of 39 non-strategic hotels, FelCor is...
After repayment of $73 million of secured debt and other costs at closing, FelCor expects to use the remaining $30 million of proceeds to pay a portion of its accrued preferred dividends (almost half of the $67.7 million arrearage) in conjunction with paying the regular quarterly preferred dividends on July 31, 2012. FelCor expects that the remaining accrued dividends will be paid in 2012 using proceeds from future asset sales.
The portfolio, which consists of 1,527 rooms, includes the Holiday Inn San Antonio-Airport, the Sheraton Suites Ft. Lauderdale-Cypress Creek, Doubletree Guest Suites hotels in Raleigh/Durham and Tampa-Rocky Point, and the Embassy Suites hotels in Boca Raton and St. Paul. The portfolio purchase price represents a 6.8% cap rate based on 2011 net operating income. When this transaction closes in the second quarter, FelCor will have sold 15 of the 25 hotels that it has brought to market since December 2010.
About FelCor
FelCor, a real estate investment trust, owns a diversified portfolio of primarily upper-upscale hotels that are located in major urban and resort markets throughout the U.S. FelCor partners with top hotel companies that operate its properties under globally renowned names and as premier independent hotels. Additional information can be found on the company's website at www.felcor.com.
Forward Looking Statements
The information presented herein may contain forward looking statements. These forward looking statements, which are based on current expectations, estimates and projections about the industry and markets in which RLJ Lodging Trust ("RLJ") and FelCor operate and beliefs of and assumptions made by RLJ management and FelCor management, involve uncertainties that could significantly affect the financial results of RLJ or FelCor or the combined company. Words such as "projects," "will," "could," "continue," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "forecast," "guidance," "outlook," "may," and "might" and variations of such words and similar expressions are intended to identify such forward looking statements, which generally are not historical in nature. Such forward-looking statements may include, but are not limited to, statements about the anticipated benefits of the proposed merger between FelCor and RLJ, including future financial and operating results, the attractiveness of the value to be received by FelCor stockholders, the attractiveness of the value to be received by RLJ, the combined company"s plans, objectives, expectations and intentions, the timing of future events, anticipated administrative and operating synergies, the anticipated impact of the merger on net debt ratios, cost of capital, future dividend payment rates, forecasts of FFO accretion, projected capital improvements, expected sources of financing, and descriptions relating to these expectations. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to expected synergies, improved liquidity and balance sheet strength — are forward looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, 2 we can give no assurance that our expectations will be attained and therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i) national, regional and local economic climates, (ii) changes in the real estate industry, financial markets and interest rates, or to the business or financial condition of either company or business, (iii) increased or unanticipated competition for the companies" properties, (iv) risks associated with acquisitions, including the integration of the combined companies" businesses, (v) the potential liability for the failure to meet regulatory requirements, including the maintenance of REIT status, (vi) availability of financing and capital, (vii) risks associated with achieving expected revenue synergies or cost savings, (viii) risks associated with the companies" ability to consummate the merger and the timing of the closing of the merger, (ix) the outcome of claims and litigation involving or affecting either company, (x) applicable regulatory changes, and (xi) those additional risks and factors discussed in reports filed with the SEC by RLJ and FelCor from time to time, including those discussed under the heading "Risk Factors" in their respective most recently filed reports on Forms 10K and 10Q. Neither RLJ nor FelCor, except as required by law, undertakes any duty to update any forward looking statements appearing in this document, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.