Humphrey Hospitality Trust, Inc. (NASDAQ: HUMP - news), a real estate investment trust (REIT), announced today that Randy Whittemore has been named President and Chief Executive Officer of the REIT. Mr. Whittemore has served as a director of the REIT since November 1994. He most recently served as senior vice president of Anderson & Strudwick, Incorporated, a brokerage firm based in Richmond, Virginia, which served as underwriter of the REIT`s public stock offerings. Prior to that, he served as a director and president and managing officer of Pioneer Federal Savings Bank and its parent, Pioneer Financial Corporation, prior to their acquisition by Signet Banking Corporation. Paul J. Schulte will continue as Chairman of the Board of Directors. The REIT expects to add additional personnel as the REIT`s management team becomes responsible for the services currently provided by Humphrey Hospitality Management, Inc., the current lessee of the REIT`s hotels (“HHM”) under an administrative services agreement.
The REIT also announced that it expects to complete its previously announced taxable REIT subsidiary (“TRS”) structuring by December 31, 2001. Under the TRS structure, the REIT will form a new taxable REIT subsidiary (100% owned by the REIT) that will become the new lessee for the REIT`s hotels. The TRS will enter into management agreements with HHM. Subject to franchisor approval, the TRS expects to become the franchisee for the REIT`s hotels. Currently, HHM is the franchisee for all the hotels. The timing of the franchise transfers will depend upon a number of factors, including the cost of transfers. In addition, the closing of the TRS structure is conditioned on approval by the REIT`s lenders.
The TRS expects to enter into a new four-year management agreement with HHM to manage the hotels. The TRS will realize any operating profit or loss after payment of hotel operating expenses, rent to the REIT under the leases, management fees to HHM and income taxes at the TRS level.
The REIT previously announced that it has implemented a new dividend policy of paying approximately 100% of annual REIT taxable income. As a result of the slowdown in travel activity following the events of September 11, the REIT cannot forecast financial results for the foreseeable future. However, based on the dividends paid by the REIT in 2001 to date and the REIT`s current projections for the remainder of 2001, the REIT believes that it is unlikely that a quarterly dividend for the fourth quarter of 2001 will be paid. The actual amount of any future dividends under this policy will be determined by the board of directors at the time of declaration and will be based on the REIT`s actual results of operations, economic conditions, capital expenditure requirements and other factors that the board of directors deem relevant.
Humphrey Hospitality Trust, Inc. is a real estate investment trust specializing in limited service hotels.
This press release may contain “forward-looking” statements as described in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements usually include words like “believes”, “anticipates” and “expects” and describe our expectations for the future. These expectations may not be met in important ways for a variety of reasons, which are described in our Current Report on Form 8-K filed with the SEC on January 22, 2001, and in other reports we file with the SEC.