Rouse to sell its hotels Cross Keys, Columbia inns don't fit focus on retail development

Real estate

December 05, 1997|By Dana Hedgpeth | Dana Hedgpeth,SUN STAFF

In a move to focus more on its retail developments, Columbia-based Rouse Co. will sell the Columbia Inn in Columbia's Town Center and the Cross Keys Inn in Baltimore.

The company is marketing the 148-room Cross Keys Inn as a part of a small, mixed-use community and the 289-room Columbia Inn as an upscale hotel in Columbia's downtown, overlooking Lake Kittamaqundi.

"We're putting them on the market because it's not a business we're in," said David L. Tripp, a Rouse vice president and its director of investor relations. "It's not a business [in which] we're particularly good at cutting costs.

"We think we can sell them to a high-quality operator with nationwide referrals. Someone who will operate at efficiencies of scale that we're not capable of."

Rouse will become a real estate investment trust, or REIT, next month, making it one of the nation's largest with a $5 billion total ZTC market capitalization and a portfolio containing 250 retail malls, festival marketplaces, community developments, office buildings and warehouse properties.

Last month, Rouse reported a 40 percent increase in its third-quarter earnings from a year ago to $48.2 million.

Tripp said there have been several inquiries concerning the hotels, but he declined to provide details. He said both properties would remain hotels.

Tucked between the Jones Falls Expressway and Falls Road, Cross Keys opened in 1965 as a self-contained 78-acre space for upscale living, working and shopping. The shopping area has long held some of Baltimore's best-known and most exclusive retailers. The hotel, opened in 1973, played host to visiting baseball teams when the Orioles played at Memorial Stadium.

Real estate industry experts say the hotel market is in its prime for sellers and expect Rouse to get a favorable deal for the properties.

"[REITs] likes specialization. Rouse specializes in the retail industry, and if they only have two hotels, I can understand why they want out," said Joe Burke, executive vice president at Legg Mason real estate services. "It's a great time to sell.

"Cross Keys is not replaceable and the Columbia Inn is the most prominent hotel in Columbia. They'll get an excellent value for those properties."

Pub Date: 12/05/97

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