CapStar Hotel Company (NYSE: CHO), a leading hotel investment and management corporation, today announced that it has completed the $150 million acquisition of six hotels from New York City-based Medallion Hotels. It is the company`s first acquisition in 1998. In 1997, CapStar acquired 28 hotels with 6,853 rooms for approximately $546 million.
“We continue to see a large number of hotels for sale at prices below replacement cost, although prices are increasing,” said Paul Whetsell, CapStar president and CEO. “Our main focus in 1998 will be on larger properties in major markets with high barriers to new development and selected hotel resort properties. We have a substantial pipeline of acquisition candidates at attractive prices.”
The six Medallion portfolio hotels are located in Texas (4), Oklahoma and Kentucky. CapStar will invest approximately $17.5 million to renovate the hotels.
“We believe there is substantial upside potential for each of the hotels in the portfolio, especially following their renovation,” said David McCaslin, CapStar chief operating officer. “We intend to complete the majority of the renovation program during the first and second quarters. We also will reflag the Medallion-branded properties to national hotel franchises, which should have a long-term positive impact on occupancy and average daily rate.”
The hotels include:
The Seelbach Hotel, Louisville, Kentucky—CapStar intends to invest approximately $3.2 million to upgrade the historic, 13-story, 321-room hotel. The property will be converted to a Hilton franchise hotel and renamed the Seelbach Hilton. Plans include replacing guest room soft goods, refurbishing corridors and enhancing business work stations in the Business Class rooms.
Medallion Hotel, Houston, Texas—The 382-room hotel will undergo a $3.5 million refurbishment and be re-flagged as the Sheraton Houston Brookhollow Hotel. The renovations will include replacing all soft goods in corridors, guest rooms and meeting space. In addition, guest rooms on the concierge level will be upgraded with large work desks, ergonomic seating and task lighting to better accommodate the needs of business travelers.
Medallion Hotel, Dallas, Texas—CapStar will reflag the 289-room hotel as the Renaissance North Dallas, following a $3.5 million renovation, which will include upgrading guest rooms and guest bathrooms, meeting space, as well as enhancing the arrival area to complement a recently completed, multi-million dollar atrium renovation. It will be CapStar`s first Renaissance by Marriott hotel.
Medallion Hotel, Oklahoma City, Oklahoma—The 399-room hotel recently finished an $8 million renovation to upgrade the lobby, the Aria Grill restaurant, lounge and meeting space. CapStar will invest an additional $2 million to upgrade business amenities in all guest rooms and to refurbish the meeting and banquet spaces. The hotel will be renamed the Westin Oklahoma City.
The Austin North Hilton and Towers, Austin, Texas—The 237-room, nine-story upscale hotel will undergo a $3 million renovation program to upgrade the meeting and banquet space. In addition, corporate floors will be created with full work stations and all new furnishings.
The Midland Hilton & Towers, Midland, Texas—The 249-room hotel will receive $2 million in renovations to replace the soft goods in guest rooms and meeting areas and to upgrade the business amenities on the property`s concierge floors.
Washington, D.C.-based CapStar Hotel Company owns and manages upscale, full-service hotels throughout the U.S. and Canada under such internationally known brands as Hilton, Sheraton, Marriott, Embassy Suites, Westin and Doubletree. Including one property currently under contract, CapStar`s hotel portfolio comprises 54 owned hotels with 14,503 rooms and 67 leased and/or managed hotels with 10,318 rooms, for a total of 121 properties with 24,821 rooms. The company continues to actively seek acquisitions and management contracts in major markets and resort locations throughout North America.
MeriStar Contact: John Emery, Chief Financial Officer, (202) 965-4455
Media Contact: Jerry Daly or Chris Daly, Daly Gray Public Relations, (609) 383-1414