Hilton officials said the sale proceeds represented a cap rate of below 10% on anticipated 2001 results. Hilton plans to use sale proceeds for general corporate purposes, including debt reduction. Apple Suites is a privately held REIT.
The hotels are located in Chesterfield, MO, which has 145 rooms, and Portland OR, which has 123 rooms. Including these two properties, Hilton will manage 15 Homewood Suites properties for Apple Suites. After this sale, Hilton now owns five Homewood Suites properties, and is pursuing opportunities to sell them.
"This transaction allows us to book a gain on the sale, reduce our debt balances and secure long term management and franchise contracts," says Mariel C. Albrecht, senior vice president and treasurer for Hilton. "We are continuing to actively look at opportunities to sell non-strategic assets at attractive prices in the months ahead."
In December 2000 Hilton sold seven Homewoods for $95 million in cash, while retaining management contracts.
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