Winston Hotels, Inc., (NYSE: WXH), a lodging real estate investment trust, and Noble Investment Group, Ltd., a leading private hotel company, today announced they have entered into a strategic alliance to finance and develop two Hilton Garden Inn hotels located in Atlanta, Georgia and Tampa, Florida and explore other similar upscale Hilton and Marriott opportunities.
The estimated total cost for both hotels is $26.0 million. Last week, Winston Hotels provided $1.08 million in mezzanine funding for the 122-room, Hilton Garden Inn in Atlanta and expects to provide approximately $2.3 million for the 150-room Hilton Garden Inn in Tampa, Florida. Noble Investment Group is responsible for providing the remainder of the funding and will own and operate the hotels. The Atlanta project is under construction and is scheduled to open during the second quarter of next year. The Tampa project is scheduled to begin construction in August of 2000 and is scheduled to open during the fourth quarter of next year. Winston Hotels will co-develop the Atlanta project with Noble Investment Group and will provide all development services for the Tampa project and receive fees for its services.
Both companies possess unique and complementary strengths and dynamics. “Winston Hotels is contributing capital in the form of mezzanine financing, but more importantly, they are highly qualified developers of premium hotels in markets with high barriers to entry and strong growth indices,” said Mit Shah, Noble Investment Group’s Executive Vice President & Chief Operating Officer. “We have been looking for a strategic development partner, as we have shifted our emphasis more towards acquisitions. We are impressed with Winston Hotels’ track record of identifying opportunities and developing first class, upscale branded assets. By Winston Hotels contributing capital in the form of mezzanine debt, we are able to benefit from their development expertise, while investing our capital toward owning and operating more hotels. We are confident that this arrangement will be valuable to both companies and provide us with excellent growth opportunities.”
Winston Hotels’ President and Chief Operating Officer, James D. Rosenberg, equally is pleased with the Company’s new strategic alliance. “We have been looking to partner with significant management organizations that are comprised of strong industry professionals who are eager to invest in and operate selected upscale hotel products. We have found such a partner in Noble Investment Group. Noble is a highly regarded, successful and well-established owner and operator of upscale brands, including those affiliated with Marriott and Hilton. Our strategic alliance allows both parties to combine a portion of their respective experience and capital to work together to achieve mutually beneficial goals: Winston Hotels with respect to its development expertise and debt capital, and Noble with respect to its operations expertise and ownership equity. We are very pleased about the ability to deploy our resources in this manner and about the positive implications, that we believe, this strategic alliance will have for our shareholders.”
“Winston continues to explore a variety of alternatives through which we can enhance our shareholders’ value. We are excited about the possibilities of exploring additional opportunities to leverage our internal development expertise and to provide mezzanine financing to other borrowers in the future,” Rosenberg added.