REIT coming to Columbia location

Humphrey leaving Silver Spring for new business park

Commercial real estate

June 22, 2000|By Meredith Cohn | Meredith Cohn,SUN STAFF

Humphrey Hospitality Trust, a Silver Spring-based real estate investment trust, plans to relocate to a new business park in Columbia.

Humphrey, among the largest limited-service hotel REITs, and its private subsidiaries that manage the hotel properties and own and operate apartments and senior homes will bring about 60 employees to the Riverwood Business Park in November, according to Paul G. Bollinger, the company's chief financial officer. The park is being developed by Nottingham Properties Inc.

The company, which employs about 2,000 around the nation, was looking for more space in the Baltimore area near where most workers live.

Officials expect Humphrey to continue growing. A recent merger with Supertel Hospitality puts its hotel holdings at 87 in 19 states, mostly in second- and third-tier markets.

Company officials expect to continue expanding, although growth may slow a bit this year. An uptick in hotel development in the past few years has outpaced demand for the rooms from travelers and left the company's growth basically flat in the past year, Bollinger said.

"We've been experiencing the competition for the last several quarters and we're holding our own," he said. "We'll not see tremendous growth in the next year."

First-quarter results for the three months ending March 31 were slightly below analyst expectations. Funds from operations, the standard measure of REIT performance, dropped to 31 cents a share, compared with 32 cents in the first quarter the year before. Total first-quarter revenue was $7.6 million, compared with $7.8 million in 1999. Richmond-based Anderson & Strudwick attributed the results to restrained business travel amid Y2K concerns and poor weather in January.

The firm, which still rates the REIT's shares a buy, expects demand to catch up to the supply of rooms and even push up rates slightly.

In a statement last year when Humphrey merged with Supertel, Chairman and Chief Executive Officer Paul J. Schulte, said the company is now more geographically diversified and has greater market capitalization, which should enhance its ability to buy more properties and weather downturns.

Richard W. Story, Howard County Economic Development Authority chief executive, said he hadn't heard about the company's decision to move to Columbia, which is experiencing a building boom.

He said the new tenant in the park, which broke ground with no one committed to space, would likely fill it. Tenants occupying the bulk of the space are Orbital Sciences Corp., which took 60,000 square feet, and Deihl Graphsoft, which plans on 30,000 square feet.

"Sometimes 100 percent spec buildings sit on the market empty, but that's just not the case in this county," he said.

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