BETHESDA, MD—LaSalle Hotel Properties is acquiring, or has plans to acquire, three hotels in Los Angeles, Portland, OR, and San Francisco for an aggregate purchase price of $500 million. The REIT tipped its hand about the purchase when it announced the sale of 7.6-million common shares in a public offering.
It said it would use the net proceeds of the offering to "fund all or a portion of the cost of future expected hotel acquisitions…" including the three aforementioned properties.
Pending such use, it also said, some of the net proceeds will be used to pay down the company's $750 million senior unsecured credit facility as well as for general corporate purposes.
Barclays, Deutsche Bank Securities and Morgan Stanley are the underwriters in the transaction and LaSalle Hotel Properties has also granted them an option to purchase up to 1,140,000 additional shares.
The REIT's last few transactions have been dispositions, such as its sale of the Hotel Viking in Newport, RI for $77 million after purchasing the hotel in June 1999 for $27 million and the sale of the Hilton Alexandria Old Town in the Washington DC area for $93.4 million.
Its last acquisition was in April when it acquired the Hotel Vitale in San Francisco for $130 million. It was the REIT's sixth hotel in that city and as CEO Mike Barnello noted at the time "we are also excited about increasing our presence in San Francisco. Room demand is at peak levels and supply growth is expected to be limited for the next several years, which bodes well for owners and operators."
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