Lodgian Unloads Two Holiday Inns for Nearly $4M

Average hard construction costs on a comparable new property are at least $80,000 per room, area construction industry sources tell GlobeSt.com. Lodgian declined to disclose the names of the separate buyers. The Memphis property, built in 1973, is at 6101 Shelby Oaks Dr. The Kentucky hotel, built in 1974, is at 8050 Holiday Pl.

The Memphis property was sold for $2.1 million or $12,139 per room. It reported negative EBITDA of $101,000 and a net loss of $521,000 for the past 12 months. The Kentucky hotel went for $1.6 million or $15,238 per room. The property reported negative EBITDA of $135,000 and a net loss of $466,000.

Lodgian has sold off 12 hotels, two land parcels and office building for a total $42 million since its disposition plan started in 2003. The company is using the proceeds to reduce its debt load. Lodgian has seven hotels and one land parcel remaining in its 19 non-strategic property disposition program.

"We continue to aggressively market the remaining hotels held for sale, but timing of the dispositions is difficult to predict with any accuracy," says Lodgian president and CEO W. Thomas Parrington. "Our goal is to complete the program during the first half of 2005, depending on a number of individual factors."

Parrington says the company is on track to complete its multi-year renovation program at its core properties by the end of the second quarter. "We also are starting to ramp up our acquisition program on a selective basis as we move into the latter stages of our disposition program."

Lodgian manages 85 hotels with 16,088 rooms located in 30 states and Canada. Of the 85 properties, 72 are under the InterContinental Hotels Group and Marriott brands; 10 are affiliated with four other national hospitality franchises; and three hotels are independent, unbranded properties.