Boykin Lodging Company (NYSE: BOY), a hotel real estate investment trust, today announced that it has increased its ownership stake in the 421-room Executive Plaza Hotel in downtown Chicago.
Boykin Lodging Company has owned an 18.75% interest in the hotel since August 1999 through its joint venture with AEW. Boykin has now acquired an additional 25% interest in the hotel from a private investor for $6.3 million, increasing Boykin`s ownership of the hotel to 43.75%.
“The Executive Plaza Hotel posted the highest revenue increase in our portfolio in the second quarter,” said Robert W. Boykin, chairman, president and chief executive officer. ” The hotel has excellent characteristics for strong financial performance: a dynamic urban market, superior location, strong existing cash flow, quality construction, and significant repositioning opportunity with considerable upside potential. The hotel is on track to begin a complete renovation of all guestrooms, meeting rooms, and food and beverage facilities next year. Once completed, the hotel`s guestrooms will be the quality of a four-star hotel.”
“We expect to have about 6,000 to 10,000 room nights taken out of service at the property next year due to the renovation,” continued Mr. Boykin. “Therefore the increase of our ownership interest in the property will result in a reduction in Funds From Operations (“FFO”) from our previous guidance of about $0.03 per share in 2001, and an increase in FFO in the range of $0.03 to $0.07 per share thereafter.
“We estimate the internal rate of return from our additional investment in this property to be in excess of 30%. This increase in ownership is part of our strategy to increase shareholder value over the long term,” concluded Mr. Boykin.
Boykin Lodging Company is a real estate investment trust that focuses on the ownership of full-service, upscale commercial and resort hotels. The company currently owns 33 hotels containing a total of 9,236 rooms located in nineteen states, and operating under such internationally known brands as Doubletree, Marriott, Hilton and Radisson, among others. For more information about Boykin Lodging Company, visit the company`s web site at www.boykinlodging.com.