Humphrey Hospitality Trust, Inc. (NASDAQ: HUMP), a real estate investment trust (REIT) with 91 limited service hotel properties, today announced results for the third quarter and nine months ended September 30, 2001.
Funds from operations (FFO) were $4.0 million, or $.33 per diluted share, for the third quarter of 2001, versus $3.8 million, or $.32 per diluted share, for the same quarter in 2000. Total revenue increased to $9.3 million, up 5.7% from $8.8 million for the third quarter of 2000. Net earnings for the third quarter were $1.9 million, or $.17 per share, compared to $1.6 million, or $.15 per share, for the third quarter of 2000.
Revenue per available room (REVPAR) was $35.55 for the third quarter of 2001, down 5.3%, from $37.52 for the same period in 2000. The reduction in REVPAR was attributed to a decline in the overall occupancy rate, from 73.2% to 68.1%, partially offset by an increase in the average daily rate (ADR), which climbed $.92 to $52.50 for the third quarter 2001, as compared to the same period in 2000.
“Although the unfortunate events of September 11, 2001 have adversely affected the hospitality industry as a whole,” commented George R. Whittemore, President and Chief Executive Officer of Humphrey Hospitality Trust, Inc., “ADR and occupancy rates at the majority of our hotels have not deteriorated significantly from levels seen in the immediate days prior to the tragedy.” Mr. Whittemore adds “our portfolio has been more affected by the persisting general downturn in the economy rather than by the recent disruption in air travel.”
The Company recently closed on the sale of its Irving, Super 8 hotel, realizing a net gain of approximately $37,000. The hotel, which was one of the 11 properties held for sale, sold for $2.4 million. “We have applied approximately $1.5 million of the proceeds from the sale of the Irving hotel to pay down existing debt, and anticipate further reductions of debt from the pending sale of four additional properties that are currently under contract or non-binding letters of intent,” stated Mr. Whittemore.
As previously announced in July 2001, the Company anticipates the formation of a taxable REIT subsidiary (TRS) to lease the REIT`s hotels during the fourth quarter of the current year, which is historically one of the weaker quarters of the year for the Company`s hotel operations. All of the REIT`s existing hotel leases with Humphrey Hospitality Management, Inc. (HHM) will be transferred into the TRS and HHM will continue to operate the REIT`s hotels under management agreements. The Company, or its TRS, plans to pay HHM a one-time fee of approximately $1 million as consideration for its assignment of the hotel leases and termination of the right of first refusal to lease hotels acquired or developed by the Company in the future. The Company anticipates that the expenses related to the closing of the TRS structure and the expected weak operating results of the fourth quarter 2001 will result in a net loss for that 3 month period.
Humphrey Hospitality Trust, Inc. is a real estate investment trust specializing in limited-service lodging. The company owns 91 hotels in 19 mid-western and eastern states. More information on Humphrey Hospitality can be found at www.humphreyhospitality.com.
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These risks are discussed in the Company`s filings with the Securities and Exchange Commission.