NEWTON, Mass.--Hospitality Properties Trust (NYSE: HPT) today
announced that it has sold 18 Homestead Studio Suites hotels (2,399
rooms) for $205.35 million. HPT expects to recognize a gain on this sale
of approximately $95 million.
HPT purchased these 18 hotels in 1999 from Homestead Village, Inc.
(which was then a publicly owned company) for $145 million. The expected
gain reflects depreciation expense realized by HPT since 1999.
Simultaneous with this purchase, these hotels were leased by HPT to a
subsidiary of that seller for minimum rent of $15,960,000/year plus
percentage rent based upon increases in gross revenues at the hotels. In
2006, the percentage rent received by HPT for these hotels was
approximately $509,000.
In 2001, an entity affiliated with Blackstone Group (NYSE: BX)
purchased Homestead Village, Inc. and HPT's tenant for these hotels. On
June 11, 2007, Blackstone sold Homestead Village, Inc. and the tenant
entity together with a larger group of hotels to an affiliate of the
Lightstone Group, a privately owned entity. This sale resolves
outstanding disputes between HPT and Lightstone. Seventeen of these
hotels were purchased by an affiliate of Lightstone for approximately
$192.25 million. One hotel was purchased by HRPT Properties Trust (NYSE:
HRP) for approximately $13.1 million, and this one hotel will be short
term leased by an affiliate of Lightstone until that hotel property may
be redeveloped as part of a larger project including adjacent property
currently owned by HRPT Properties Trust.
HPT intends to use the net proceeds from the sale of these hotels to
reduce amounts outstanding under its revolving bank credit agreement.
Hospitality Properties Trust is a real estate investment trust which
owns 292 hotels and 186 hospitality and travel centers located
throughout the United States, Puerto Rico and Ontario, Canada.
Hospitality Properties Trust
Timothy A. Bonang
617-796-8149
Manager of Investor Relations
www.hptreit.com