Winston Hotels has closed on an $8.5 million loan to finance the development of a 101-room Hampton Inn & Suites in Murfreesboro, Tenn. The total estimated cost of the project, which is being developed by Host Murfreesboro, LLC, is $10.2 million.
In addition, the company announced the sale of the Holiday Inn Select in Garland, Texas and declared its regular quarterly dividends.
Hampton Inn & Suites Loan
The $8.5 million loan is part of Winston’s debt financing program, which provides loans to build, renovate or acquire hotels. The five-year loan requires payments at an interest rate of 30-day LIBOR plus 3.60 percent, with another 1.0 percent of the original principal balance accruing until the loan is paid in full. Payments are interest only during construction of the hotel and the first 12 months of hotel operations and thereafter include principle payments based on a 25-year amortization period. “The Murfreesboro project has a lot going for it, including a premium brand and a prime location in an urban market with solid growth potential,” said Joe Green, president and chief financial officer.
“Winston’s unique combination of hotel experience and lending expertise made them an attractive and logical source of funding for this project,” said Bryan Nearn, Chief Manager of Host Murfreesboro, LLC.
The four-story hotel will be located on the west side of Thompson Lane, placing it between two Interstate 24 interchanges—Old Fort Parkway and Medical Center Parkway. The property is within a short distance of the downtown area, the main Murfreesboro exit and a new roadway and growth corridor.
The company recently sold the 242-room Holiday Inn Select in Garland, Texas, a Dallas suburb, for net cash proceeds totaling $4.4 million, resulting in a net gain on sale of approximately $0.5 million. Proceeds were used to pay down a portion of the company’s outstanding indebtedness.
“We continue to refine our hotel portfolio, replacing older properties and those that are no longer consistent with our long-term strategies with new, more strategic assets,” Green said. “We currently have three hotels under construction and have an active acquisition pipeline.”
Winston’s board of directors declared the company’s regular quarterly cash dividend for the 2006 second quarter on its common and preferred shares. The cash dividend of $0.15 per common share is payable on July 14, 2006 to common shareholders of record on June 30, 2006. Based on yesterday’s closing price of $10.67 per common share, the annualized dividend yield is 5.6 percent.
The board also declared a cash dividend of $0.50 per Series B Cumulative Preferred share for the second quarter of 2006. The cash dividend is payable on July 14, 2006, to preferred shareholders of record on June 30, 2006.