Host Marriott to sell 34 limited-service properties It will lease back the 16 Courtyard and 18 Residence Inn hotels

February 07, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Host Marriott Corp. yesterday announced plans to sell 16 Courtyard and 18 Residence Inn hotels for $349 million, a move that completes its strategy of disposing of limited-service lodging properties.

Under terms of the sale to Hospitality Properties Trust, a Massachusetts real estate investment trust, Host Marriott will then lease the hotels at a cost of $610 million through 2011, and pay a slight percentage of the properties' increased revenues.

In exchange, the Bethesda-based hotel owner will receive residual cash flow from the projects, which on a pro-forma basis would have amounted to $3 million last year.

The sale, involving nearly 4,500 rooms, is expected to close next month.

Host Marriott expects to invest the proceeds from the sale into full-service hotels.

The transaction marks the third time that Host Marriott has completed a deal with Hospitality Properties Trust.

Last year, the REIT acquired 37 Courtyard projects under similar terms.

Last month, Host Marriott agreed to buy a full-service Toronto-based hotel for $25 million and acquire controlling interests in four more full-service hotels for $86.6 million. The company also filed to sell 25 million common shares to raise $300 million to finance new full-service lodging acquisitions.

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