Intown Suites, Inc. Announces Recapitalization, Investments From Lazard Freres Real Estate Investors

24th Sep 1998

Intown Suites, Inc. (“Intown Suites”), a leading developer and operator of budget segment, extended-stay residences, and Lazard Freres Real Estate Investors, LLC (LFREI) today announced that an affiliate of LFREI has signed a definitive agreement to recapitalize Intown Suites.  The recapitalization is in the form of a strategic preferred equity investment from LFREI and values in Intown Suites at approximately $125 million.

Under terms of the agreement, LFREI will initially invest $80 million of preferred equity in Intown Suites, and has committed to invest an additional $70 million of preferred equity over the next two years.  LFREI will retain rights to invest an additional $150 million in Intown Suites under various circumstances.  Based upon the committed financing, Intown Suites is expected to develop over $750 million of extended-stay properties over the next two years.

“We are very pleased to partner with David Vickers and his excellent management team at Intown Suites to help fund the next stage of growth for the Company,” said Arthur P. Soloman, head of real estate at Lazard Freres & Co., LLC and the Senior Principal of LFREI.  “We believe Intown’s dynamic management team generates the highest development yields and net operating income margins in the industry.”

“We are excited to have LFREI as our strategic partner as we set the stage for the nationwide growth of Intown Suites,” said David Vickers, Chief Executive Officer of Intown Suites.  “Lazard brings an extraordinary level of commitment and expertise to our organization.  We look forward to a long and productive partnership with LFREI as we strive to bring the value of Intown Suites to new markets.”

Robert P. Freeman, Principal and President of LFREI, Murray Gunty and Klaus Kretschmann, also Principals of LFREI, will join the board of Intown Suites.


Terry Brown of Arthur Andersen LLP’s Real Estate Capital Markets Group advised Intown Suites on the transaction.

Intown Suites is a leading developer and operator of budget segment, extended-stay residences.  Based in Atlanta, GA, Intown Suites owns and operates 26 facilities in 9 states.

Lazard Freres Real Estate Investors, LLC (LFREI) is the real estate investment affiliate of Lazard Freres & Co., LLP, a leading global investment bank.  LFREI manages several real estate investment funds, including a strategic investment program capitalized with approximately $2.4 billion in equity.  Since its inception, LFREI has acquired sizable investment stakes in a select group of leading real-estate operating companies, including American Apartment Communities; ARV Assisted Living, Inc.; Atlantic American Properties (formerly Bell Atlantic Properties); Atria Communities, Inc.; Center Trust, Clivedon plc; Commonwealth Atlantic Properties (formerly RF&P Corporation); Dermody Properties; The Fortress Group; Kapson Senior Querters; Konover Property Trust, Inc.; and The Rubenstein Company, LP.



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