InnSuites Hospitality Trust sold its Buena Park, California 176 unit hotel
property for a net price of $6.5 million, which is approximately the
property`s book value, on October 17, 2003. This sale, along with two
additional planned hotel sales, is expected to further improve the quality
of the Trust`s portfolio and further increase the cash available to
improve the Trust`s remaining more profitable properties. The Trust
received $3.2 million in cash and a $200,000 note receivable after the
satisfaction of its mortgage note on the property. This sale is expected
to improve the stability of the Trust by reducing debt, creating cash
reserves, and eliminating future operating losses associated with the
property.
The Trust currently has its San Diego, California property in escrow and
expects to finalize the sale by March 2004. The net sales price (after
sales commission) for this property, under the terms of the sale contract,
is $9.6 million in cash. The property has a current book value of $4.8
million and a mortgage note of $4.8 million. The Trust expects the sale to
result in a gain of $4.8 million and net cash proceeds of $4.8 million. In
addition, the Trust is planning the sale of its Tempe hotel property which
is expected to substantially reduce debt and enhance the stability and
earnings of the Trust.
The Trust has aggressively worked to reduce expenses and increase
efficiencies. These efforts, combined with targeted disposition
activities, are expected to position the Trust to benefit from the
recovery of the travel and hospitality industries anticipated over the
next 12 to eighteen months. A strategic decision of selling weaker assets
and investing in the stronger performing properties should increase
positive cash flows as the economy continues to improve.
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