Host Marriott to purchase 7 hotels for $149 million

October 25, 1994|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

Host Marriott Corp. will acquire seven hotels from the Equitable Life Assurance Society of the United States for $149 million by the end of the year, the two companies announced yesterday.

The seven hotels in six states will add 2,287 rooms to Host Marriott's lodging portfolio of 110 properties containing more than 28,000 rooms.

The acquisitions are part of the company's overall strategy to purchase full-service hotels. Before yesterday's announcement, the Bethesda-based real estate company this year had spent $323 million to purchase nine properties with 4,204 rooms.

The transaction also underscores the general improvement experienced by hotel markets nationwide in a rebound from the mid-1991 low point when the economic recession, the Persian Gulf war and cutbacks in corporate travel contributed to sluggish occupancy rates and few investment sales.

"As the hotel sector shows marked improvement, these lodging properties have become highly attractive assets," said George R. Puskar, chairman and chief executive of Equitable Real Estate Investment Management Inc., a subsidiary of Equitable Life Assurance and the nation's largest commercial real estate investor with a portfolio exceeding $37 billion.

Locally, Equitable's most notable real estate asset is the 35-story 10 Light St. skyscraper, which is primarily occupied by NationsBank Corp. Equitable Life Assurance is a unit of New York-based Equitable Cos. Inc.

The seven hotels are the Sheraton Denver Tech Center; the Portland, Ore., Marriott; the Williamsburg, Va., Hilton; the San Francisco Marriott Fisherman's Wharf; the Singer Island Holiday Inn in Sunspree, Fla.; the Springfield, Mo., Radisson; and the Napa Valley, Calif., Sheraton Inn.

Host Marriott intends to invest $12 million to upgrade the properties. They also will be converted to the Marriott brand and managed by Marriott International Inc., which split from the former Marriott Corp. in October 1993.

In the first three quarters of this year, Host Marriott reported a net loss of $10 million, or 7 cents a share, on operating profit of $138 million and revenues of $1.05 billion. Its earnings before interest expense, taxes, depreciation and amortization rose to $266 million in the period ended Sept. 9, an 8 percent increase.

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