FelCor Lodging Trust Incorporated (NYSE: FCH) and Interstate Hotels (NASDAQ: IHCO), today jointly announced the closing on a joint venture agreement for the ownership of seven Marriott®-branded hotels and one Hampton Inn® hotel. Interstate assumed the management of the hotels on January 1, 2001. The completion of this transaction signifies the first joint venture between FelCor and Interstate. FelCor and Interstate each will own 50% of the new partnership. The eight hotels, valued at $77 million, will be leased to newly formed entities also owned 50% by FelCor and 50% by Interstate, and will be managed by Crossroads Hospitality Management Company, an affiliate of Interstate.
The eight hotels include: Fairfield Inn®-Scottsdale-Downtown, Ariz.; Courtyard by Marriott®-Atlanta-Downtown, Ga.; Fairfield Inn-Atlanta-Downtown, Ga.; Fairfield Inn-Dallas-Regal Row, Texas; Courtyard by Marriott-Houston-Near the Galleria, Texas; Fairfield Inn-Houston-I-10-East, Texas; Fairfield Inn-Houston-Near the Galleria, Texas and the Hampton Inn®-Houston-I-10-East, Texas.
Pursuant to the joint venture agreement, Interstate is contributing $8.1 million to the new partnership. The joint venture has closed on a loan for approximately $52 million with cash proceeds to FelCor of approximately $48 million. In addition to FelCor’s 50% equity interest, FelCor will retain a preferred interest of approximately $17 million in the joint venture.
“Aligning with Interstate allows us to achieve our ongoing goal of matching our hotels with the best managers,” said Thomas J. Corcoran, Jr., FelCor’s President and CEO.
According to Thomas F. Hewitt, Chairman and CEO of Interstate Hotels, “We are pleased to establish what we hope to be a long-term relationship with FelCor Lodging Trust, a well respected and proven company. These hotels are located in great markets, and we look forward to working with FelCor on taking these properties to the next level of success.”
Subsequent to the closing of the joint venture agreement, substantial renovations will begin on the hotels.
FelCor Lodging Trust Incorporated is the nation’s second largest hotel real estate investment trust (REIT). FelCor’s hotel portfolio consists of 186 hotels with nearly 50,000 rooms and suites and is concentrated primarily in the upscale and full-service segments. FelCor is the owner of the largest number of Embassy Suites®, Crowne Plaza®, Holiday Inn® and independently owned Doubletree®-branded hotels. Other leading hotel brands under which FelCor`s hotels are operated include Sheraton Suites®, Sheraton® and Westin®. FelCor has a current market capitalization of approximately $3.6 billion. Additional information can be found on the Company’s web site at www.felcor.com.
Interstate Hotels Corporation, one of the largest independent hotel management companies, operates approximately 140 hotels with more than 28,000 rooms in 38 states in the United States as well as Canada, the Caribbean and Russia. For more information, visit www.interstatehotels.com.