Hilton Hotels Corp. (NYSE:HLT) today announced the sale of two Homewood Suites by Hilton properties for $22 million, representing a cap rate of below 10 percent on anticipated 2001 results, to Apple Suites Realty Income Trust Inc., a privately held REIT based in Richmond, Va.
Hilton will retain franchise agreements, and also will manage the extended-stay hotels, which are located in Chesterfield, Mo. (145 rooms) and Portland, Ore. (123 rooms). Including this sale, Hilton will manage 15 Homewood Suites properties for Apple Suites.
The company plans to use proceeds from the sale for general corporate purposes, including debt reduction.
The sale reduces to five the number of corporate-owned Homewood Suites by Hilton properties. In December 2000 Hilton sold seven Homewoods for $95 million in cash, while retaining management contracts. The company currently is pursuing opportunities to sell additional Homewood properties.
“This transaction allows us to book a gain on the sale, reduce our debt balances and secure long term management and franchise contracts,” said Mariel C. Albrecht, senior vice president and treasurer for Hilton. “We are continuing to actively look at opportunities to sell non-strategic assets at attractive prices in the months ahead.”