Lodgian, Inc. (AMEX:LGN), one of the nation`s largest independent owners and operators of full-service hotels, today announced that the company plans to sell 19 non-core hotel properties, or approximately 20 percent of its owned portfolio. The hotels are primarily full-service properties in secondary and tertiary markets. Proceeds from the sales will be used to pay down debt and to re-invest in the company`s remaining properties.
“We are timing these sales to take advantage of an increasingly attractive hotel real estate market,” said W. Thomas Parrington, president and chief executive officer. “With the sale of these non-core hotels, we expect to be able to significantly reduce our debt and further strengthen our balance sheet.”
Parrington noted that part of the proceeds will be used to accelerate renovation programs at the company`s remaining core properties to improve the hotels` competitive position in those markets. “Our core properties are well located and are being upgraded and positioned to take advantage of the forecasted rebound in the hotel sector,” he said. “To date, we have spent approximately $30 million on upgrades at our properties. We have nearly completed our stabilization program and are turning our attention to gaining market share and improving profitability.
“We believe the size and type of hotels we are selling typically are more effectively operated by individuals or small investor groups tied into the community than by a large corporation,” he commented. “We are better structured to own and operate larger, mid-market properties in primary and selected secondary markets and will focus our attention there. Several properties are already under contract, and we expect to close several sales by year end.”
Parrington noted that he believes the hotel real estate market is becoming more attractive as evidence of an economic and hotel industry rebound continues to grow. “As the business climate improves and Lodgian`s portfolio strengthens, the company also will consider buying hotels in strategic partnership arrangements and, later, will re-examine new development.”
The national brokerage firms of CB Richard Ellis Hotels (CBRE Hotels) and Hodges Ward Elliott (HWE) have been engaged to market most of the hotels. Based in Chicago, CBRE Hotels is an international firm that has sold nearly 50 hotels with an aggregate value of $290 million in the first six months of 2003. Information on the hotels for sale through CBRE Hotels can be obtained by calling Robert Taylor at (404) 923-1272. For information about the Lodgian hotels being brokered by HWE, call Mark Elliott at (404) 238-0924, or visit www.hwehotels.com
Lodgian is one of the largest independent owners and operators of full-service hotels in the United States. The company currently manages a portfolio of 97 hotels with 18,265 rooms located in 30 states and Canada. Of the company`s 97 hotel portfolio, 82 are under the InterContinental Hotels Group (Crowne Plaza, Holiday Inn, Holiday Inn Select and Holiday Inn Express) and Marriott brands (Courtyard by Marriott, Fairfield Inn and Residence Inns), and 10 are affiliated with four other nationally recognized hospitality franchises. Five hotels are independent, unbranded properties. For more information about Lodgian, visit the company`s Web site: www.lodgian.com.
This press release includes forward-looking statements related to Lodgian`s operations that are based on management`s current expectations, estimates and projections. These statements are not guarantees of future performance and actual results could differ materially. The words “may,” “should,” “expect,” “believe,” “anticipate,” “project,” “estimate,” “plan,” and similar expressions are intended to identify forward-looking statements. Certain factors are not within the company`s control and readers are cautioned not to put undue reliance on forward-looking statements. These statements involve risks and uncertainties including, but not limited to, the company`s ability to generate sufficient working capital from operations and other risks detailed from time- to-time in the company`s SEC reports. The company undertakes no obligations to update events to reflect changed assumptions, the occurrence of unanticipated events or changes to future results over time.