(CORTE MADERA, Calif.) - Karl Hoagland, chairman, president and CEO of Larkspur Hospitality Development and Management Company, LLC (LHDMC), an independent hotel company, today announced the completion of a refinancing agreement with Greenwich Capital Markets (GCM). LHDMC raised $107 million of new capital in a $90 million first mortgage provided by GCM and $17 million in preferred equity financing.
“Our ability to raise this amount of capital in the current economy, which has severely impacted the hotel industry, is a reflection of our strong performance in 2002,” said Hoagland. “Times are very difficult for everyone in the hotel industry these days, and LHDMC is fortunate to have so many committed and hard working professionals in our hotels and home office. Their accomplishments and performance during the past year has us on a path for long term success and growth.”
LHDMC’s portfolio of 16 owned and operated hotels closed out the year with eight consecutive months of market share gains and cash flow preservation exceeding hotel industry averages. Market share of LHDMC also increased to another high in January 2003, resulting in cash flows for the month exceeding budget by more than $600,000. In addition to these successes, recent guest surveys indicate that consumers appreciate the hotels’ modern facilities and attentive customer service - with LHDMC achieving guest satisfaction scores that far exceed the industry average.
Besides allowing LHDMC to repay a prior loan that was maturing at the end of this year, the $90 million floating rate first mortgage, with its’ four-year term, provides LHDMC with favorable long-term financing.
Greenwich RefinancingLarkspur Hospitality’s growth plans center on developing Larkspur hotels in select locations, acquiring hotels and adding management contracts. “Now that we have completed the private financing and have an established history of revenue growth as well as a solid corporate infrastructure and people resources, we are looking to acquire and develop new hotels, as well as share that expertise with third party hotel owners by managing hotels where we can create the same results for them,” said Hoagland.
For 2003, a new phase of substantial external growth is expected. Larkspur Hospitality is actively looking for independent or branded three and four diamond hotels as well as in-fill hotel sites on the West Coast in strategic business or resort locations. According to Hoagland, “We have over $100 million of committed growth capital and we’re looking for strategic hotel acquisitions or development opportunities.”
Larkspur Hospitality Company, an independent hotel company based in Corte Madera, California, owns and operates 16 hotels comprising within three brands (Larkspur Landing, Candlewood Suites and Hilton Garden Inn) in suburban areas of Northern California and the Pacific Northwest. Larkspur Hospitality also manages the PruneYard Inn in Campbell, CA owned by Equity Office Properties. Hotel Business magazine listed LHC as one of the top 15 hotel management companies in the United States based on Revenue per Available room. Each of the past three years, the San Francisco Business Times named Larkspur Hospitality one of “The 150 Fastest Growing Companies in the Bay Area.”