Boykin Lodging Company (NYSE: BOY), a multitenant hotel real estate investment trust, today announced measures to sustain its long term growth by implementing revisions to its strategic growth plan.
T1) he company announced its intent to sell non-strategic hotel assets. A portion of the proceeds of these sales would be used to retire debt.
2) The board of directors has authorized the purchase by the company of up to one million shares, or approximately six percent of the company’s common shares, in the open market at price levels and at times management deems appropriate. Proceeds to effect the purchase of these shares would come from a portion of the sales proceeds referred to above, or from borrowings which would be repaid from a portion of the proceeds from those sales.
3) The company announced that it has engaged the investment advisory firm of Chadwick, Saylor & Co. to assist it in accessing private capital to continue its growth in a fashion appropriate for current market conditions.
“Several factors influenced the Board’s decision,” said Robert W. Boykin, chairman, president and chief executive officer. “First, the directors believe that the company’s business strategy of acquiring assets at a discount to replacement cost and improving their value by renovation or repositioning is appropriate, especially in this phase of the real estate cycle. Second, they believe current and planned renovation activity will increase the earning power of the renovated hotels and support the company’s ongoing growth trend despite some temporary flattening of quarter-to-quarter financial comparisons. And third, they believe that overall stock market conditions have caused many investors to overreact to circumstances unrelated to the value of Boykin Lodging’s shares.”
“The additions to our strategic plan complement and enhance the strategy that we have been using all along and which has been effective in sustaining solid growth over the long term,” Mr. Boykin said.
Bill Chadwick, Managing Partner of Chadwick, Saylor & Co., commented, “The recent changes in the public markets for real estate companies create a unique opportunity, and we believe the management team and structure that Boykin Lodging employs can allow it to take advantage of this illiquid phase of the real estate cycle. We are exploring possibilities on behalf of the company.”
Boykin Lodging Company is a multitenant real estate investment trust, which focuses on the acquisition of full-service, upscale commercial and resort hotels. The company currently owns 31 full-service commercial and resort hotels containing a total of 8,689 rooms located in California, Colorado, Florida, Idaho, Indiana, Maryland, Minnesota, Missouri, Nebraska, New York, New Jersey, North Carolina, Tennessee, Ohio, Oregon, and Washington. Since January 1998, Boykin has increased its portfolio by 13 hotels and a total of 3,838 rooms.