The line of credit will be reduced by another $500,000 next February, the company reports in its earnings conference call.

"As we shift more to a development mode, we intend to seek longer-term financing to better align with the duration of the development and sales cycle times, as well as new construction, acquisition or conversion financing," explains president and chief executive officer Jerry H. Herman. "We also are considering engaging an investment advisor in the near future to assist us in achieving this goal."

The recent sales follow a record 2003, which saw Arlington Hospitality sell off 11 properties. However, the company hopes to add 20 to 30 properties to its portfolio by the end of 2005.

"With the economy and hotel industry showing signs of recovery, we are seeing increased interest from potential buyers of our hotels," Herman says. "We currently have five hotels under sales agreements and are marketing an additional 20 properties."

Net proceeds from Operation Sell are expected to come in around $12 million, he adds.

Occupancy and revenue remained flat in the fourth quarter, in line with results for the rest of 2003, Arlington Hospitality reports. Fourth-quarter occupancy was 51.5%, with RevPAR of $29.08.

Meanwhile, the company recently restructured its lease agreement with PMC Commercial Trust on 21 hotel properties by $85,000 a month.