Meristar (NYSE:MHX)
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MeriStar Hospitality Corporation (NYSE: MHX), one of the
nation's largest hotel real estate investment trusts (REIT), today
announced that it has sold the 204-room Hilton Monterey to Valencia,
Calif.-based Ocean Park Hotels, a hotel developer, owner and operator,
for $20.5 million, or approximately $100,000 per key. Ocean Park
Hotels said it plans to manage the hotel and invest approximately $5
million in renovations.
"We were able to sell this property for almost 20 times
trailing-twelve-month EBITDA* and reduce our required capital
expenditures," said Paul Whetsell, chairman and CEO. "When you factor
in the capital spending avoided as a result of the transaction, our
sales multiple would have been approximately 25 times."
The company plans to use the proceeds of the sale for business
purposes including debt reduction and capital expenditures for its
existing assets. The company has indicated that its 2005 earnings
guidance includes approximately $40 million in sales proceeds in
addition to the Hilton Monterey proceeds. The company expects to
complete these dispositions in the third quarter. "We will continue to
review our portfolio and take advantage of opportunities to divest
selected properties at attractive pricing and where we believe we can
more effectively redeploy the proceeds into uses that will be
accretive to our shareholders," Whetsell stated.
Arlington, Va.-based MeriStar Hospitality Corporation owns 72
principally upscale, full-service hotels in major markets and resort
locations with 20,115 rooms in 22 states and the District of Columbia.
The company owns hotels under such internationally known brands as
Hilton, Sheraton, Marriott, Ritz-Carlton, Westin, Doubletree and
Radisson. For more information about MeriStar Hospitality, visit the
company's Web site: www.meristar.com.
*EBITDA is a non-GAAP financial measure and should not be
considered as alternatives to any measures of operating results under
GAAP. Trailing-twelve-month Net Loss for the Hilton Monterey was
$(0.3) million, which consisted of $1.0 million of EBITDA less $1.3
million of depreciation and amortization.
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Forward-looking statements,
which are based on various assumptions and describe our future plans,
strategies and expectations, are generally identified by our use of
words such as "intend," "plan," "may," "should," "will," "project,"
"estimate," "anticipate," "believe," "expect," "continue,"
"potential," "opportunity," and similar expressions, whether in the
negative or affirmative. We cannot guarantee that we actually will
achieve these plans, intentions or expectations. All statements
regarding our expected financial position, business and financing
plans are forward-looking statements. Except for historical
information, matters discussed in this press release are subject to
known and unknown risks, uncertainties and other factors which may
cause our actual results, performance or achievements to be materially
different from future results, performance or achievements expressed
or implied by such forward-looking statements. Factors which could
have a material adverse effect on our operations and future prospects
include, but are not limited to: economic conditions generally and the
real estate market specifically; supply and demand for hotel rooms in
our current and proposed market areas; other factors that may
influence the travel industry, including health, safety and economic
factors; competition; cash flow generally, including the availability
of capital generally, cash available for capital expenditures, and our
ability to refinance debt; the effects of threats of terrorism and
increased security precautions on travel patterns and demand for
hotels; the threatened or actual outbreak of hostilities and
international political instability; governmental actions, including
new laws and regulations and particularly changes to laws governing
the taxation of real estate investment trusts; weather conditions
generally and natural disasters; rising interest rates; and changes in
generally accepted accounting principles, policies and guidelines
applicable to real estate investment trusts. These risks and
uncertainties should be considered in evaluating any forward-looking
statements contained in this press release or incorporated by
reference herein. All forward-looking statements speak only as of the
date of this press release or, in the case of any document
incorporated by reference, the date of that document. All subsequent
written and oral forward-looking statements attributable to us or any
person acting on our behalf are qualified by the cautionary statements
in this section. We undertake no obligation to update or publicly
release any revisions to forward-looking statements to reflect events,
circumstances or changes in expectations after the date of this press
release.