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WHITE PLAINS, NY-A partnership that includes Olympus Real Estate Partners, Rockwood Capital, Prudential Real Estate Investors and HEI Hospitality has acquired 12 US hotels from Starwood Hotels & Resorts Worldwide, Inc. for approximately $300 million. The Partnership expects to consummate the purchase of one additional hotel from Starwood within days. Starwood expects to sell the other remaining hotel that was included in the originally announced transaction later this year.

The deal involves 3,678 rooms and is comprised of six Sheratons, two Westins, one Marriott, two Hiltons and one independent flagged facility. Among the properties that changed hands include several in Fairfield County, CT–the 462-room Westin Stamford and the 242-room Sheraton Danbury hotel. Other major hotel properties sold by Starwood to the Olympus partnership include: the Sheraton Buckhead in Atlanta; Sheraton Chicago; Sheraton College Park in Beltsville, MD.; Sheraton Ferncroft in Danvers, MA.; Sheraton Norfolk in Norfolk, VA.; Westin Southfield in Southfield, MI.; Residence Inn Tyson’s Corner in Vienna, VA.; Hilton Novi in Novi, MI.; Hilton Sonoma County in Santa Rosa, CA and the Wayfarer Inn in Bedford, NH.

Starwood officials say the eight Sheraton hotels will remain under the same flag and the Hilton Novi will be converted to a Sheraton hotel. HEI Hospitality, which is based in Norwalk, CT, will assume management of a majority of the 12 properties. On June 30, HEI announced that it had completed the acquisition of the Hilton Novi in Novi, MI, for an undisclosed amount with joint venture partner Prudential Real Estate Investors. The company stated that the 239-room hotel would be immediately converted to a Sheraton brand and be renamed Sheraton Detroit Novi. Smilezzzz Hospitality will manage the hotels. As part of the transaction, HEI expects to introduce additional franchising opportunities for Starwood brands.

“We believe this is a win-win situation for both the Partnership and Starwood,” says Clark W. Hanrattie, partner, Olympus Real Estate Partners. “The hotels are in excellent physical condition and are well positioned to benefit from the expected rebound in corporate travel.”

“We expect to invest approximately $10 million to make certain strategic renovations at several of the properties,” adds Gary Mendell, managing partner of HEI Hospitality. “Our goal is to keep the hotels in their current peak condition to retain a competitive edge in their respective markets. We’ve grown rapidly in the past 10 months, and we continue to seek acquisitions of first-class, full-service hotels, both individual properties and portfolios.”

HEI officials said at the time the Hilton Novi deal was part of a group of 14 hotels HEI and other joint venture partners were buying from Starwood. Officials with Starwood were not available for comment on which two hotels were dropped from the previously announced purchase deal. Based on its initial report on the sales deal with the Olympus partnership released on May 21, the two hotels dropped were: the 197-room Sheraton Gainesville hotel in Gainesville, FL., and the 296-room Sheraton North Charleston hotel in North Charleston, SC.

With the closing on the 12 domestic hotels, Starwood has raised approximately $955 million in 2003 thus far from hotel asset sales. The company adds that it expects to complete the sale of six additional “non-strategic” domestic hotels later this year that will push the proceeds from hotel asset sales to approximately $1.1 billion this year. Until recently, the company had stated that outside of the Olympus partnership deal, Starwood had planned to sell an additional four domestic hotels in 2003.

Starwood officials say the company plans to use the proceeds from its most recent hotel asset sale to pay down existing debt, including the retirement of $250 million of Sheraton Holding bonds when they mature in November of this year.

The recent sale of two Starwood hotels in Italy–the Costa Smeralda in Sardinia and the Hotel Principe di Savoia in Milan–allows Starwood to repay a $450 million Euro credit facility, company officials add.

Starwood also reports that it has completed an amendment to its senior corporate credit facility with a lending consortium led by Deutsche Bank and JP Morgan Chase. The amendment modifies certain financial covenants of a $300 million term loan and a $1 billion revolving loan to “allow for additional flexibility in the current operating environment.”

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